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Chapter 5

An agent can also do all things incidental to actions expressly authorised and all
things usually done by an agent.

Apparent or ostensible authority

Apparent or ostensible authority arises where the principal, by words or
conduct, holds out to another party that the agent has authority to act
on his behalf.

An agent may have limited actual express authority but, by virtue of the
conduct of the principal, has that authority extended.

Apparent authority is therefore not restricted and is determined by the
actions of the principal. The extent of authority differs according to
individual circumstances and cannot be defined generally.

If a third party enters into a contract with an agent in these
circumstances, relying on the original conduct of the principal, then the
contract is binding.

Breach of warranty of authority

As discussed earlier if an agent has no authority or exceeds it the principal may ratify
the contract and become liable. However, if the principal does not ratify, then the
agent will be liable to the third party for breach of warranty of authority because he
warranted or promised that he had authority which he did not possess.

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