No apparent authority exists where the third party knows that the agent has no actual authority.

Question

Quizplus · Accepted Answer

Apparent authority exists when a third party reasonably believes an agent has the authority to act on behalf of the principal, based on the principal's representations. If the third party knows the agent lacks actual authority, then no apparent authority can exist because the belief in the agent's authority is not reasonable.

No Apparent Authority Exists Where the Third Party Knows That