Agent Definition and Legal Meaning

n. it describes a situtation in which a principle leads a third party to believe that an agent has authority to bind the principle, even where the agent lacks the actual authority to bind the principle, hence the authority is seemingly clear but not necessarily so. There must be some act or some knowing omission on the part of the principle – if the agent alone acts to give the third party this false impression, then the principle is not bound. For instance, providing Joe Slobovia, who does not have authority to contract, with materials, stationary, forms, a truck with a company logo, or enabling him to work out of the company office, so that a reasonable person would believe that Joe had authority to act for the company, can grate “apparent authority”. Therefore, if Joe gives a contract or price quote that is accepted by a third party, it 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.