Also known as: apparent agents · ostensible agent
Written by attorneys · grounded in primary & secondary sources — see below
A person who reasonably appears to have authority to act for another. The appearance arises from the principal's manifestations that cause a third party to believe the person speaks for the principal. Such a person holds power to alter the legal relations between the principal and third persons.
Apex Insurance placed Dana in charge of a regional claims office and authorized her to negotiate settlements with policyholders' counsel. During talks, Dana emailed Luis confirming expanded warehouse coverage without home-office review. When the warehouse later burned, Apex denied the extension. Dana's role as apparent agent gave her power to bind Apex to the new terms in its relations with the policyholder.
Orion Manufacturing named Carla plant manager and allowed her to sign supply contracts for the factory. Facing a shutdown, Carla negotiated and signed a rush contract with Nova Metals in Orion's name at above-policy prices. Nova seeks enforcement. Carla's position as apparent agent supplied the power to alter Orion's legal relations with Nova despite internal purchasing limits.
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An apparent agent binds the principal through the principal's manifestations that cause reasonable third-party belief in authority, even without actual authority. Actual authority arises from the principal's direct manifestations to the agent. Both confer power to alter the principal's legal relations with third parties.
Supporting sources
Yes. When the principal's manifestations create reasonable belief in authority, the apparent agent can bind the principal even if internal policies require higher approval. Third parties need not investigate undisclosed limits.
Supporting sources
No. Reasonable reliance on the principal's manifestations suffices. Sophisticated parties may still rely when the principal places the person in a visible decision-making role and fails to correct appearances.
Supporting sources