Which term describes the situation where a third party believes that an agent has authority, regardless of whether that authority was actually granted?

The term that best describes the situation where a third party believes that an agent has authority, regardless of whether that authority was actually granted, is known as "Apparent Authority." This legal concept occurs when a principal's actions lead a third party to reasonably assume that an agent has the authority to act on behalf of the principal.

In cases of apparent authority, the principal may not have explicitly authorized the actions taken by the agent, but their behavior or prior dealings can create an impression that the agent has the necessary authority. This could happen, for example, if a principal allows an agent to act in certain situations without correcting the third party's belief in the agent's authority.

The other terms describe different aspects of authority. Express authority refers to the explicit and clear authorization granted to an agent by the principal. Implied authority relates to the authority that is not verbally stated but is necessary to fulfill the express authority the agent has. Actual authority involves the authority that an agent legitimately has, which can be either express or implied. Understanding the distinction among these types of authority is crucial in the context of agency relationships and the ramifications for both principals and third parties.