Which type of authority can be seen when an agent acts in a way that represents their belief they have the right to act?

The correct answer is based on the concept of apparent authority. This type of authority arises when a principal's actions or the circumstances lead a third party to reasonably believe that an agent has been given the right to act on the principal's behalf, even if the agent lacks formal authorization. In this context, if an agent acts in a way that suggests they believe they have authority—such as presenting themselves as authorized to make decisions, sign contracts, or represent the principal—third parties may accept that belief, leading to a situation where the principal may be bound by the agent's actions.

Apparent authority is critical in real estate and title insurance practices because it governs interactions between agents and third parties who might rely on the agent's representation. This reliance creates an obligation for the principal, who cannot later deny the agent's authority if it appears reasonable from the third party's perspective.

The other types of authority differ in their mechanisms: express authority involves clearly defined permissions given directly by the principal; implied authority pertains to the authority necessarily inferred through the agent's role or the custom of the business; while authorship is not a recognized term related to this context.