What is another term for apparent agency?

Prepare for the BPA Business Law and Ethics Test with engaging flashcards and multiple choice questions. Each question comes with explanations to enhance understanding. Succeed in your exam confidently!

The term "apparent agency" refers to a situation where a third party reasonably believes that an agent has the authority to act on behalf of a principal, even when there is no actual authority granted. This often arises from the actions, conduct, or representations made by the principal, leading the third party to assume that the agent has the requisite authority to perform specific tasks or enter into agreements.

"Agency by estoppel" is another way of describing this situation. It highlights the principle that the principal can be "estopped" or prevented from denying the agent's authority if the principal's own actions have led to the third party's belief in that authority. For example, if a business allows an employee to appear to be acting within their authority by conducting various transactions without objection or correction from the business, then it may later be held to that belief even if no formal authority was granted.

The other terms do not accurately capture the concept of apparent agency in the same way. "Implied authority" refers to authority that is not explicitly stated but can be inferred from the actions of the parties involved. "Agency by consent" highlights situations where the principal and agent expressly agree to the relationship, but it does not encapsulate the idea of third-party reliance.

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