Apparent authority arises from which of the following?

Apparent authority is a legal concept that refers to the situation where a principal's actions or circumstances create an impression that an agent has authority to act on the principal's behalf. This authority is not explicitly granted but instead arises from the way the principal has conducted itself or presented its relationship with the agent to third parties.

For instance, if a principal consistently allows an agent to perform specific tasks or engage with clients in a certain manner, a third party may reasonably believe that the agent has the authority to act in ways that the principal has not directly approved. As a result, the principal may be bound by the agent’s actions, even if those actions exceed the scope of any explicit authority granted. This principle protects third parties who rely on the reasonable belief that an agent is acting within their authority based on the principal's conduct.

In contrast, the other options do not align with the definition of apparent authority. Explicit statements from the agent would suggest actual authority rather than apparent authority. A private agreement between two parties would not be visible to third parties and therefore would not contribute to the appearance of authority. Lastly, the past behavior of the agent alone also fails to establish apparent authority; it must be linked to the principal's representation or conduct as well.