What is Apparent Authority?
Apparent authority, also known as “ostensible authority,” is the power or authority that an individual or organization appears to have based on the actions or statements of another individual or organization. Apparent authority can be created by an express or implied representation of the individual or organization’s authority, such as through a statement or action that implies that the individual or organization has the authority to act on behalf of another.
Apparent authority can be important in determining legal liability. For example, if a person enters into a contract with an individual or organization based on their apparent authority, the individual or organization may be legally bound by the terms of the contract even if they do not have actual authority. It is important for individuals and organizations to be aware of and manage their apparent authority in order to avoid potential legal liabilities.
Types of Apparent Authority:
There are two types of apparent authority: express and implied.
- Express apparent authority: Express apparent authority is created by a specific representation or statement of authority by an individual or organization. For example, if a company’s president tells an employee that they have the authority to sign contracts on behalf of the company, the employee has express apparent authority to sign contracts.
- Implied apparent authority: Implied apparent authority is created by the actions or conduct of an individual or organization that implies that the individual or organization has authority. For example, if an employee consistently performs certain tasks or makes certain decisions without being challenged, they may be deemed to have implied apparent authority to perform those tasks or make those decisions.
Apparent Authority policy:
An apparent authority policy is a policy that outlines the circumstances under which an individual or organization has the power or authority to act on behalf of another individual or organization. The policy may specify the types of representations or actions that can create apparent authority and the procedures for managing and limiting apparent authority.
An apparent authority policy can be useful for establishing clear guidelines and boundaries for individuals or organizations that may have apparent authority, such as employees or agents. It can help to prevent misunderstandings or disputes about the scope of authority and can help to protect the individual or organization from potential legal liabilities.
An apparent authority policy may be included as part of a broader set of policies, such as a code of conduct or a conflict of interest policy. It is important for individuals and organizations to be familiar with and follow their apparent authority policy in order to manage and limit their apparent authority effectively.