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Multiple Choice

Which of the following can terminate apparent authority?

Apparent authority ends when the basis for the third party’s belief in the agent’s authority is removed or negated. Revocation by the principal clearly terminates it: the principal withdraws the agent’s authority and communicates that the agent no longer has power to bind the principal. Estoppel can terminate apparent authority too, because if the principal’s prior conduct led a third party to rely on the agent’s authority, later actions that negate that appearance can prevent further reliance and bar the principal from claiming the agent had authority. Ratification also terminates apparent authority for that act because when the principal ratifies the agent’s unauthorized act, authority becomes actual; the basis for assuming apparent authority disappears since the act is now officially authorized. So all of these situations can end apparent authority.

Apparent authority ends when the basis for the third party’s belief in the agent’s authority is removed or negated. Revocation by the principal clearly terminates it: the principal withdraws the agent’s authority and communicates that the agent no longer has power to bind the principal. Estoppel can terminate apparent authority too, because if the principal’s prior conduct led a third party to rely on the agent’s authority, later actions that negate that appearance can prevent further reliance and bar the principal from claiming the agent had authority. Ratification also terminates apparent authority for that act because when the principal ratifies the agent’s unauthorized act, authority becomes actual; the basis for assuming apparent authority disappears since the act is now officially authorized. So all of these situations can end apparent authority.