Ostensible Authority Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Ostensible Authority, written in plain English, along with examples of how it is used.
What is Ostensible Authority?
Right given to a person to represent or do something on behalf of another person or corporations.
History and Meaning of Ostensible Authority
Ostensible authority is a legal term that refers to the situation where a person has the appearance or impression of having the authority to act on behalf of another person or company. This means that even if the person does not have the actual authority to act, if others believe that they do based on the circumstances, then they are said to have ostensible authority. This concept originated from the common law, which is the system of law that developed in England and that forms the basis of many legal systems throughout the world.
Examples of Ostensible Authority
An employee who works in the sales department of a company approaches a customer and says that the company will provide a discount on a particular product. The customer later goes to the company to claim the discount but is told that there is no such discount. However, the customer can argue that the employee had the ostensible authority to make such a representation, and therefore the company is bound by it.
A contractor who is hired by a homeowner to renovate their house hires subcontractors to perform certain tasks. One of the subcontractors mistakenly damages a part of the house, and the homeowner seeks to hold the contractor liable. The contractor can argue that they did not have actual authority over the actions of the subcontractor, but they had ostensible authority because the homeowner believed that the contractor was responsible for all aspects of the renovation.
A lawyer who works for a law firm approaches a potential client and tells them that the firm can provide legal representation in a certain matter. The potential client agrees to hire the firm, but later finds out that the lawyer did not have the actual authority to make such a representation. However, the firm may be bound by the lawyer's representation if the client can show that the lawyer had ostensible authority.
Legal Terms Similar to Ostensible Authority
Apparent Authority: Apparent authority is similar to ostensible authority, and often used interchangeably with the term. It refers to the authority that a person appears to have based on the circumstances, even if they do not have actual authority.
Implied Authority: Implied authority is authority that is not explicitly granted, but is necessary for a person to perform their duties. For example, an employee who is hired to manage a restaurant has implied authority to hire and fire employees, even if this authority is not written down in their job description.
Actual Authority: Actual authority is the authority that a person or entity has explicitly granted to another person. For example, a company may give their manager the actual authority to sign contracts on behalf of the company.