apparent authority
The appearance of authority that a principal creates, leading a third party to reasonably believe an agent can act for them.
Definition
Apparent authority arises when a principal's words or conduct make an outsider reasonably believe that an agent is authorized, even if the agent is not. For example, if a client lets an agency present itself as its official representative to vendors, a vendor may reasonably rely on that. The principal can then be held to the agent's commitments. For this reason, principals should tell third parties clearly about any limits on authority and end relationships formally. Rules vary by jurisdiction. This entry is a general explanation, not legal advice.
In a sentence
The vendor relied on apparent authority because the client's name appeared on the agency's emails.
Telling suppliers about spending limits reduces the risk of apparent authority disputes.
