2. (b) Yes, you chose the better answer. It is probably overstating the position to say that the agent has a discretion in these circumstances. In the event of uncertain or ambiguous instructions, the agent should seek clarification from the principal, if this is possible, to find out what the principal intends.

If clarification cannot be sought (for example, if communication with the principal is impossible for some reason) then the agent must act on an honest and reasonable interpretation of the instructions.