What Is an Ostensible Agency Agreement

Friday December 30th, 2022

As a professional, I am able to explain the concept of an ostensible agency agreement in simple terms to make it easily understandable for all readers. An ostensible agency agreement refers to a legal relationship between two parties where one party acts as the agent of the other party, but without a formal or direct… View Article

As a professional, I am able to explain the concept of an ostensible agency agreement in simple terms to make it easily understandable for all readers.

An ostensible agency agreement refers to a legal relationship between two parties where one party acts as the agent of the other party, but without a formal or direct agreement between them. This means that the agent represents the principal (the party they act on behalf of), without having been explicitly authorized to do so.

This type of agreement is also known as apparent authority, where someone is given the appearance of being authorized to act on behalf of another, without actually being authorized to do so. Essentially, the actions of the agent create the appearance of an established relationship with the principal, despite no formal or direct agreement existing between the two parties.

The most common example of an ostensible agency agreement is when a company employs a salesperson to represent its products or services. Even though there might be neither a written nor an oral agreement, the salesperson appears to have authority to negotiate deals, enter into contracts, and make decisions on behalf of the company.

However, it is essential to note that ostensible agency agreements are based on actions rather than words. The principal does not state the agent’s authority explicitly, but rather, the representation of the agent creates the impression that they hold the authority to act on behalf of the principal.

In conclusion, an ostensible agency agreement refers to a legal relationship between two parties where one party acts as the agent of the other party, without a formal or direct agreement between them. It is based on actions rather than words, and the actions of the agent create the appearance of an established relationship with the principal.