Business; Litigation
Gaines v. Kelly
8/24/07  05-1092
Opinion by Justice Medina

Agent's authority to act depends upon communication by principal.

An agent's authority to act on behalf of a principal depends on some communication by the principal, either to the agent (actual or express authority), or to the third party (apparent or implied authority).

Agent's apparent authority based on estoppel.

Apparent authority is based on estoppel, arising either from a principal knowingly permitting an agent to hold himself out as having authority, or by a principal's actions, which lack such ordinary cars, as to clothe an agent with the indicia of authority, thus leading a reasonably prudent person to believe that the agent has the authority he purports to exercise. The principal's full knowledge of all material facts is essential to establish a claim of apparent authority, based on estoppel. Moreover, when making that determination, only the conduct of the principal is relevant. Finally, the standard is that of a reasonably prudent person, using diligence and discretion to ascertain the agent's authority. Thus, to determine an agent's apparent authority courts examine the conduct of the principal and the reasonableness of the third party's assumptions about authority.

Agent's authority assumed to be co-extensive with the business entrusted to his care.

Because an agent's authority is presumed to be co-extensive with the business entrusted to his care, it includes only those contracts and acts, incidental tot he management of the particular business, with which he is entrusted.

State Bar of Texas Civil Digest
September 5, 2007