apparent authority


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apparent authority

n. 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 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. (See: agency, ostensible authority)

apparent authority

the situation where, objectively looked at, it seems that an agent does have the authority of his principal. Where an agent has apparent authority to enter into a transaction, the fact that he lacks real authority will not necessarily render the transaction void; the appearance of authority will operate to create an ESTOPPEL or bar preventing the principal from denying the existence of such authority. See AGENCY.
References in periodicals archive ?
It is interesting to question here, however, whether the courts' objective assessment of the apparent authority of the "agent" might be compatible with an evaluation of the reasonable carriage of the risks created or encouraged by the principal, and whether this prospect might encourage the would-be principal to be slightly more cautious when embarking on novel forms of commercial transaction.
Importantly, this differs from RULLCA, which eliminates statutory apparent authority in an LLC.
Cascades argues that the district court erred by concluding that no material factual issue exists regarding Nick Newton's apparent authority to orally bind West Bend to workers' compensation coverage before the date West Bend approved coverage.
A principal must take some affirmative step in creating the appearance of authority, one that the principal either intended to cause, or "should realize" likely would cause a third party to believe that the putative agent has authority to act on the principal's behalf The principal's words, conduct, or other representation need not be witnessed directly by or made directly to the third party, but the representation of authority must be traceable to the principal for the principal to be liable on a theory of apparent authority.
LEGAL COMMENTARY: It may be hypothetically debatable whether a hospital reputation induces a patient to seek treatment therein from a doctor with the apparent authority of the institution, can be deemed a "blameless principal" when the doctor ultimately is guilty of medical malpractice.
Mortgage had actual authority to sell the disputed notes [the fraudulently sold mortgages] to Fannie Mae, it had apparent authority to do so.
Apparent authority is when the employee carries a title that implies the ability to bind the company, such as manager or vice president.
The 12-member Guardian Council, made up of clerics and experts in Islamic law and closely allied to Khamenei, must certify election results and has the apparent authority to nullify an election.
The computer may look like the Second World War Enigma machine, but pat the keys with apparent authority while hiding the screen.
Such fights can go on and on; the companies are still disputing whether the branch manager had apparent authority to give the warranties.
11) Actual authority may be express or implied, "as opposed to the apparent authority that enables agents to bind other entities," in contracts not involving the government.
Guilsfield's apparent authority was achieved through goals from Tom Coulson and Graham McGill (penalty).