What is the difference between implied and apparent authority?
Do you know – that’s a difficult one! I seem to remember a BPP answer within their revision kit which tries to explain it – and there’s also the problem about ostensible authority!
Apparent authority – so far as I am concerned – is attributed to any partner or director – simply because they ARE a partner or director.
Implied is where the Courts will imply that, because of their actions – or equally the actions of the directors or partners – or inaction! the person we are looking at has been allowed to act as though they were partner / director.
Would you be able evaluate by understanding of these terms;
Apparant Authority – A person such as a director or partner has the “apparant” authority to bind the company to contracts as a normal Partner or director would have, however if the 3rd party is aware that there is no actual authority the contract is not binding to the company however the contract can be ratified??
Implied authority is where a person who has no actual authority but has apparant authority becuase of the position they occupy or through previous dealings is given “Implied” authority by the courts?
Thanks in advance,
Hi Paul – it’s certainly a brave attempt! I’m not however convinced that you have not simply said the same thing twice!
Surely, a summary of your post is that “a director / partner has authority because they are a director / partner. And if it comes to the crunch, the Courts would say the same”
Implied and Apparent authority are very similar and hard to distinguish between.
Here’s how I understand it, please correct me if I’m wrong:
Express – Principal tells Agent specifically what they can do
Implied – Agent has been appointed with express authority, but it is implied that they can do other things which agents in their position normally do. Or to do things which the principal has not specifically forbidden.
Apparent – The 3rd party gets the impression that the Agent has the authority to act. The impression is given by the Principal either by giving the Agent an office/position or through previous dealings (allowing previous contracts to be made). However in reality the Principal may not have given ANY authority to the agent, whether Express or Implied.
Hence the Principal is ‘stopped’ (estoppel) from denying the “authority” of the agent.
How does this sound guys? Please comment and/or correct.
Sounds good to me – I always hesitate to try to distinguish these ( implied, apparent and ostensible )
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