What is apparent authority

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Reference no: EM1399197

Penelope Principal tells Ambika Agent her sales agent that under no circumstances does she have authority to make any warranties covering the chairs she sells for Penelope. No third party ever learns about Penelope's limitation on Ambika's authority. Then Ambika goes out as well as makes the prohibited warranties in a sale of 100 chairs to Tekla Third. The warranties Ambika makes are usual in the trade, Tekla knows this, and Tekla knows nothing about the limitation on Ambika's authority. Did Ambika have indirect authority to bind Penelope here? What about apparent authority?

Reference no: EM1399197

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