Apparent authority refers to which of the following?

• A. Powers NOT given by the agency agreement, but that a reasonable person would presume the agent has
• B. Powers given to the agent as part of the agency agreement
• C. Powers NOT given by the agency agreement, but necessary to complete the functions
• D. Authorities granted under a separate contract

Answer: (A)

Apparent authority happens when the principal’s actions or representations lead a third party to reasonably believe the agent has authority to act for the principal, even though no express grant exists. The description that fits best says these are powers not given by the agency agreement but that a reasonable person would presume the agent has. The key idea is the third party’s reasonable reliance on how the principal presents the agent’s role—and the principal can be bound by those acts under apparent authority. This differs from actual authority, which comes from what’s expressly granted or implied by the agency relationship, and from authority created under a separate contract.