What is ostensible authority?
How do you legally define it?
What are the important elements that you must know!
In this article, we will break down the legal definition of “ostensible authority”, so you know all there is to know about it!
We will look at the ostensible authority definition and what it entails.
Let’s dig into our legal dictionary!
Are you ready?
Let’s get started!
What is ostensible authority
The term ostensible authority means that someone appears to have the authority to do something on behalf of another.
The term “ostensible authority” is used interchangeably with “apparent authority”.
In agency law, when someone appears to be duly authorized to represent a business entity, company or individual, then that person (the agent) has the “ostensible authority” to legally engage the company (the principal).
When you walk into retail store, a person wearing a uniform labelled “manager” and bearing the company logo has ostensible authority to act on behalf of the company.
The circumstances along with a person’s actions, conduct, statements and manifestations can lead a reasonable person to believe that the person has the authority to act (and potentially legally bind) another.
Ostensible authority definition
According to Cornell Law School’s Legal Information Institute, ostensible authority can be defined as follows:
The power of an agent to act on behalf of a principal, even though not expressly or impliedly granted
In other words, from the perspective of a third party, a person reasonably appears to have the authority to bind another.
Types of authority
There are three types of authority:
- Express authority
- Implied authority
- Apparent authority
Ostensible authority refers to “apparent authority” where an agent appears to have authority to act (not necessarily the actual authority to do so).
In summary, “ostensible” authority means:
- There is a relationship between an agent and a third party
- The third party believes the agent represents another party (the principal)
- The third party’s belief results from the circumstances of how the agent interacts with the third party (there is an assumption or perceived authority)
- The principal tolerates or permits the agent to deal with its affairs