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 principal and even though his 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 based on the agent's apparent authority. This means that the third party reasonably believed that the agent had the authority to enter into the contract on behalf of the principal, even though the agent exceeded their actual authority or the principal did not ratify the contract.

In Certain Cases, a Third Party Can Hold a Principal