What happens when agency by certification is established?

When agency by certification is established, it indicates that an agent has been granted authority by a principal to act on behalf of the principal under specific circumstances, typically formalized in writing or through official documentation. This authority enables the agent to engage in transactions and take actions that are legally binding on the principal.

In the context of establishing an agency by certification, the principal is effectively confirming and accepting the acts performed by the agent, even if those acts are unauthorized or go beyond the agreed authority. This acceptance is vital, as it asserts the principal's acknowledgment of the agent's representation, even if the principal did not explicitly sanction every specific action taken by the agent.

The other options do not align with the definition and implications of agency by certification. While one could argue about the liabilities of the principal and agent in other contexts, the hallmark of agency by certification is the principal's acceptance of the agent's actions, which helps clarify the expectations and responsibilities involved in that relationship.