In short
Apparent authority exists when a principal's words or conduct lead a third party to reasonably believe that an agent has authority to act, even though the agent has no actual authority.
Key takeaways
- The principal is bound to the third party, but may have a claim against the agent.
- It arises from the principal's conduct, not from the agent's own statements.
- After the agency ends, third parties who dealt with the agent may need notice to end apparent authority.
Where it's tested
REG: Business Law: Agency & Business Structures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A principal fires an agent but does not notify a long-standing supplier who had regularly dealt with that agent. The former agent places an order with the supplier in the principal's name. Who is liable to the supplier?