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which of the following is included in agent’s ostensible authority?
1. The authority that the third party expects the agent to have.
2. the authority that the agent states that they have.
3. the authority that is usual in circumstances and what the principal impliedly gives the agent.
4. the authority that principal expressly gives the agent.sir, I think 1 is correct. but in book it is given 3 is correct. isn’t that 3rd point is implied authority?
I get confused on implied authority and apparent authority always. can you pls tell me the prominent point so that I won’t have doubts on those two authorities.
Implied actual authority (also called “usual authority”)
Where an agent has express authority, it is sometimes necessary that the agent needs to do something else not expressly allowed in order to carry out the express instructions
“You have the authority to clean my swimming pool” will impliedly also cover the authority necessary to use my brush and to acquire the chemicals necessary to clean the pool
Partners have the implied authority to enter into contracts that bind the firm and the other partners
Apparent authority (also called “ostensible authority”)
exists where the principal’s words or conduct would lead any reasonable person to believe that the agent was authorised to act, even if the principal and the purported agent had never discussed such a relationship.
It’s the position of the agent that gives the authority – a bar manager has the apparent / ostensible authority to conduct business, on behalf of the principal, of a nature normally associated with the running of a bar
So, it’s the role or position held by the agent that determines ostensible authority – is it normal for people in that position to have that authority?
Is that better?
okay I got it 🙂
but one thing ”The authority that the third party expects the agent to have” ..which authority is this?.
is it express and implied authority ?if agent exceeds it’s authority and incurred liabilities, who is liable for third party. agent or principal?
agent having apparent authority entered into contract and incurred liabilities. can principal deny from A’s authority?
“but one thing ”The authority that the third party expects the agent to have” ..which authority is this?.
is it express and implied authority ?”None – it’s of no consequence what authority a third party thinks an agent should have. It IS important to consider what is the apparent authority of a person acting in the position of an agent
“if agent exceeds it’s authority and incurred liabilities, who is liable for third party. agent or principal?”
If the agent states that he is an agent and is acting beyond his authority, but the third party could not know that the authority was being exceeded, the principal will be liable. But the principal in turn could recover any losses suffered from the agent
“agent having apparent authority entered into contract and incurred liabilities. can principal deny from A’s authority?”
No, doctrine of estoppel and / or doctrine of apparent authority. In the Watteau v Fenwick case the only ways that the third party could have known that the agent was exceeding specific restrictions are:
1) if the agent had said to the tobacco products representative “I know I’m exceeding my authority here but, yes, let’s go ahead and sign the purchase agreement” or
2) where the pub owner had pinned a notice behind the bar, in plain view, that the bar manager had NO authority to buy tobacco products on behalf of the pub
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