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apparent authority

n. the appearance of being the agent of another (employer or principal) with the power to act for the principal. Since under the law of agency the employer (the principal) is liable for the acts of his employee (agent), if a person who is not an agent appears to an outsider (a customer) to have been given authority by the principal, then the principal is stuck for the acts of anyone he allows to appear to have authority. This "apparent authority" can be given by providing Joe Slobovia (who has no authority to contract) with materials, stationery, forms, a truck with a company logo, or letting him work out of the company office, so that a reasonable person would think Joe had authority to act for the company. Then the contract or the price quote given by Joe and accepted by a third party 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. Beware of the salesman who exceeds his authority or the hanger-on who claims to work for the boss.

See also: ostensible authority  agency 

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The People's Law Dictionary by Gerald and Kathleen Hill Publisher Fine Communications

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