Agent Apparent Authority Definition

What is apparent authority of agent ?

The concept of apparent agency or authority focuses not upon the actual relation of a principal and agent, but the apparent relationship. Manifestations by the alleged principal which create a reasonable belief in a third party that the alleged agent is authorized to bind the principal create an apparent agency from which spring the same legal consequences as those which result from an actual agency.

Billops v. Magness Construction Co., Del.Supr., 391 A.2d 196, 198 (1978); citing Finnegan v. Robino-Ladd Co., Del.Super., 354 A.2d 142 (1976).

"A principal is bound by an agent's apparent authority which he knowingly permits the agent to assume of which he holds the agent out as possessing." Crumlish v. Price, Del.Supr., 266 A.2d 182, 183, 184 (1970); citing Baurhenn v. Fidelity & Deposit Co. of Maryland, 114 N.J.L. 99 (N.J. 1935).

"Ordinarily, an agent can bind the principal on an apparent authority basis only if the third person involved reasonably concludes that the agent is acting for the principal." International Boiler Works Co. v. General Waterworks Corp., Del.Supr., 372 A.2d 176, 177 (1977); citing Guyer v. Haveg Corporation, Del.Super., 205 A.2d 176, 180 (1964), aff'd, Haveg Corporation v. Guyer, Del.Supr., 226 A.2d 231 (1967); 3 C.J.S. Agency s 391 (1973).