A person has apparent authority as an agent when the principal's words or conduct leads a third person to reasonably believe that the person has that authority and the third person relies on that appearance.

Question

Quizplus · Accepted Answer

Apparent authority is based on the agent's appearance of authority to third persons, created by the principal's words, conduct, or other indicia of authority. This means that if a third person reasonably believes the agent has that authority and relies on that appearance, the principal can be bound by the agent's actions, even if the agent didn't actually have that authority. Therefore, the statement is true.

A Person Has Apparent Authority as an Agent When the Principal's