Apparent authority in agency is primarily determined by what?

• A. The principal's internal documents.
• B. The agent's personal belief.
• C. The reasonable perceptions of third parties.
• D. The contract between the principal and agent.

Answer: (C)

Apparent authority hinges on what a reasonable third party believes about the agent’s power to act, based on the principal’s outward actions and communications. If the principal presents the agent as having authority, or doesn’t promptly correct a third party’s mistaken belief, that third party’s reliance can bind the principal. It isn’t about the agent’s personal belief, nor about internal documents alone, nor the contract between the principal and agent (which governs actual authority). The key factor is the third party’s reasonable perception of the agent’s authority as created by the principal’s actions or representations.