Also known as: actual authority · apparent authority · agency authority
Written by attorneys · grounded in primary & secondary sources — see below
Authority possessed by an agent to affect the legal relations of the principal either because the principal has manifested consent to the agent or because the principal has manifested to third persons that the agent has such power.
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Coastal Capital gave Marilyn business cards listing her as Associate Advisor and allowed her to meet clients at firm offices without disclaimers. Mark received a discretionary trading form on firm letterhead signed by Marilyn and transferred funds in reliance. Coastal Capital later denied her authority to bind the firm on trading authorizations.
Zenith Studio as general partner of Dusk Studio allowed Judy to negotiate advertising contracts on firm letterhead. Dawn Studio entered revenue-sharing deals with Judy believing she spoke for the partnership. Dusk Studio later refused payment claiming Judy lacked authority.
Amber introduced Samuel to Sun Jet as the partner handling hardware commitments. Samuel signed a manufacturing supply contract in his name alone and later listed Sun Flight as the responsible party. Sun Jet sued the partnership after nondelivery.
Antonio purchased medical care and clothing for the household while Angela was unavailable. The provider billed Angela directly after Antonio failed to pay. Angela claimed she had never authorized the purchases.
Andrew's counsel of record told opposing counsel that Andrew had agreed to a settlement figure. Opposing counsel relied on the representation and dismissed pending claims. Andrew later denied authorizing the settlement amount.
Jack assured White Telecom of discounted fiber rates and priority restoration during outages based on his ongoing customer role. White Telecom bought equipment in reliance. Maple Wireless refused the pricing as unauthorized by sales management.
Apparent authority arises from the principal's manifestations to third persons that reasonably lead them to believe the agent has power. Actual authority arises from the principal's manifestations of consent directly to the agent. Both allow the agent to bind the principal in transactions with third parties.
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Yes. Under partnership statutes a partnership is liable for a partner's wrongful acts or omissions when the partner acts in the ordinary course of business or with actual or apparent authority of the partnership.
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A limited partner is not an agent solely by reason of limited-partner status. Other law such as apparent authority may still impose liability on the partnership if the general partner created reasonable belief in third parties that the limited partner spoke for the entity.
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A lawyer of record is presumed to have apparent authority to settle litigation. Absent notice of limitations the opposing party may rely on counsel's representations and enforce the settlement against the client even if actual authority was exceeded.
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No. Inherent agency power arises solely from the agency relation itself and exists to protect third parties harmed by or dealing with the agent even when actual or apparent authority is absent.
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