In certain cases,a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his or her principal and even though his or her principal elected not to ratify the contract made by the agent.The third party can enforce the contract because of:

Question

Quizplus · Accepted Answer

The third party can enforce the contract because of the agent's apparent authority. This means that the third party had reason to believe that the agent had the authority to act on behalf of the principal, even if the principal did not give the agent actual authority. Therefore, the third party can hold the principal to the contract even without the principal's ratification.

In Certain Cases,a Third Party Can Hold a Principal to a Contract