Dictionary

  • Ostensible authority

    The authority to act as agent which a third party assumes has been given by a principal to another person as a result of the principal’s representation. Also means, a legal relationship between principal and contractor created by a representation, which is made by the principal to the contractor and is intended to be and in fact is acted upon by the contractor, that the agent has authority to enter on behalf of the princpal into a contract of a kind within the scope of the ‘apparent’ authority so as to render the principal liable to perform any obligations imposed on him/her by such a contract. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel to prevent the principal from asserting that he/she is not bound by the contract. Examples of such authority arise where principals, by words or conduct, hold out their agents as having authority to perform particular acts, and third parties are entitled to assume that the agents actual authority is commensurate with their ostensible authority.

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