A buyer designates his sales agent to sign documents on his behalf. This arrangement is called:

• A. Power of Attorney
• B. Agency By Estoppel
• C. Limited Liability
• D. Procuring Cause

Answer: (A)

When a buyer authorizes someone else to sign documents for them, this is a power of attorney. The buyer (the principal) grants the agent (the attorney-in-fact) authority to act on their behalf in specific matters, such as signing contracts, deeds, and related closing documents. This instrument can be limited to a single transaction or cover certain acts for a set period, allowing the designated person to legally bind the principal in the transaction even if the principal isn’t present.

This differs from agency by estoppel, which arises when a principal’s actions lead third parties to believe an agency exists and the principal later disputes that authority. It also differs from procuring cause, which concerns which agent initiated and brought about the sale, not who may sign documents. Limited liability refers to a business structure and has no bearing on signing authority.