Define: Apparent Authority

Apparent Authority
Apparent Authority
Quick Summary of Apparent Authority

Apparent authority is a legal concept that allows a person or entity to be bound by the actions or representations of another party, even if that person or entity did not explicitly grant authority. It arises when a principal (such as a company or individual) creates the impression that someone has the authority to act on their behalf, leading a third party to reasonably believe that the individual has the authority to act within the scope of their apparent authority. This can occur through the principal’s words, conduct, or other circumstances. If a third party reasonably relies on the apparent authority of the agent and suffers harm as a result, the principal may be held liable for the actions of the agent. Apparent authority is based on principles of fairness and estoppel, aiming to protect the reasonable expectations of third parties who rely on the apparent authority of agents in their dealings with the principal.

What is the dictionary definition of Apparent Authority?
Dictionary Definition of Apparent Authority

n. the appearance of being the agent of another (employer or principal) with the power to act for the principal. Since under the law of agency the employer (the principal) is liable for the acts of his employee (agent), if a person who is not an agent appears to an outsider (a customer) to have been given authority by the principal, then the principal is stuck for the acts of anyone he allows to appear to have authority. This “apparent authority” can be given by providing Joe Slobovia (who has no authority to contract) with materials, stationery, forms, a truck with a company logo, or letting him work out of the company office, so that a reasonable person would think Joe had authority to act for the company. Then the contract or the price quote given by Joe and accepted by a third party is binding on the company. Apparent authority may also arise when Joe works for the company, has no authority to contract, but appears to have been given that authority. Beware of the salesman who exceeds his authority or the hanger-on who claims to work for the boss.

Apparent Authority is a legal concept that refers to the authority that a person or entity appears to have, based on the actions, words, or conduct of another person or entity. It is the authority that a reasonable person would believe an individual or organization possesses, even if it is not explicitly granted or authorized. Apparent Authority can arise when someone is given the impression that a person has the power to act on behalf of another, even if that person does not actually have the legal authority to do so. This concept is often used in contract law and agency relationships to determine the extent of an individual’s or organization’s liability for the actions or representations made by someone who appears to have authority.

Full Definition Of Apparent Authority

Apparent authority refers to a situation where a person or entity, such as an agent or employee, appears to have the authority to act on behalf of another person or entity, even though they may not actually have the legal authority to do so. This concept is based on the principle of estoppel, which prevents a person from denying the authority of another person or entity if they have allowed that person or entity to act as if they had authority. In order for apparent authority to exist, there must be a representation by the principal (the person or entity being represented) that the agent or employee has authority, and a reliance on that representation by a third party. The third party must also have acted in good faith and without knowledge of the lack of actual authority. If these elements are met, the principal may be bound by the actions of the agent or employee, even if they did not have actual authority to act. However, if the third party had knowledge or reason to know that the agent or employee did not have authority, then apparent authority may not apply.

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This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March, 2024.

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