Question

Jonah and Jaycee are partners. Which of the following illustrates the concept of mutual agency?

Answer 1

The option that illustrates the concept of mutual agency is D. Jonah signs a purchase agreement with a supplier while Jaycee agrees to hire a marketing firm to drum up business.

• A Mutual agency simply means a legally binding relationship that is undertaken by business partners whereby each person can make a decision on behalf of the other person.

• In such a case, whenever there's a decision to be taken maybe the purchase of goods or payment, a partner can make the decision without having to inform the other person.

• Based on the illustrations above, since Jonah and Jaycee are partners, they can take decisions on behalf of each other.

In conclusion, Jonah can sign a purchase agreement with a supplier while Jaycee agrees to hire a marketing firm to drum up business.

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