Business Definition for: apparent authority
apparent authority
doctrine that a
principal
is responsible for the acts of his
agent
where the principal by his words or conduct suggests to a third person that the agent may act in the principal's behalf, and where the third person believes in the authority of the agent.
apparent authority
Related Terms:
situation wherein the agent's conduct causes a client or prospective insured reasonably to believe that the agent has the authority to sell an insurance policy and contract on behalf of the insurance company. For example, if an agent continues to use insurance company documents, such as its application forms, rate manuals, stationery, and emblems on the door, the client has every reason to believe that the agent does in fact continue to represent the insurance company.
Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright © 2000, 1995, 1991, 1987 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.