What does apparent authority refer to?

Apparent authority refers to the authority that a reasonable person would believe an agent possesses based on the actions or representations made by the principal. In a situation where a principal has acted in a way that suggests to a third party that the agent has certain powers or the ability to act on their behalf, that third party may assume the agent has that authority, even if it was not explicitly given.

This concept is particularly important in the context of business and legal relationships, as it protects third parties who may be relying on the perceived authority of an agent. For instance, if a company allows an employee to conduct transactions without clearly outlining that these powers are limited, the company may still be held accountable for the employee's actions under the doctrine of apparent authority.

In contrast, the other options refer to specific types of authority that are not necessarily based on how an agent is perceived by third parties. Written authority refers to formal documentation, authority derived from employer’s policy relates to internal guidelines, and authority limited to specific tasks pertains to restrictions placed on the agent's power. All of these do not encompass the broader perception-based aspect that defines apparent authority.