REG Agency · Updated November 2026
Actual or Apparent Authority: Who Created the Authority?
Ask whether the authority came from the principal communicating with the agent or with the third party.
Express actual authority
The principal directly authorizes the agent to act.
Implied actual authority
The authority is reasonably necessary to carry out the agent's express authority or responsibilities.
Apparent authority
The principal's conduct causes a third party reasonably to believe the agent has authority. The agent cannot create apparent authority merely by claiming authorization.
Ratification
A principal may later adopt an unauthorized act when applicable requirements are satisfied.
The takeaway
Actual authority lives in the principal-agent relationship. Apparent authority lives in the principal-third-party relationship.
Related Summit guides
FAQ
Can the agent create apparent authority alone?
Generally no.
Can actual authority be implied?
Yes.
Can an unauthorized act later bind the principal?
Potentially through ratification.