Apparent authority arises when the principal creates an appearance of authority in an agent that leads a third party to conclude that the agent has authority to act for the principal.

Question

Quizplus · Accepted Answer

Apparent authority is a recognized form of agency in which a principal leads a third party to believe that an agent has authority to act on behalf of the principal. This belief may be created by the principal's words, actions, or past conduct, and the third party relies on this appearance of authority in dealing with the agent. Even if the agent does not have actual authority to act for the principal, the principal may be bound by the agent's actions based on the doctrine of apparent authority.

Apparent Authority Arises When the Principal Creates an Appearance of Authority