Question

Giving examples from both the Partnership Act 1892 (NSW) and the Corporations Act 2001 (Cth), explain what is meant at law by the apparent or ostensible authority.

Answer 1

Apparent or ostensible authority has to act on behalf of, or for the partner or enterprise of the authority within that partnership / company. In compliance with the Marriage Act and the Law of the Corporations, when acting on behalf of another entity, there is a fiduciary or allegiance duty among the relevant parties. Each spouse is entitled to act on behalf of other partners in Partnership Behave. The Agent is authorized to act on behalf of the Company under the Corporation Law. The statute of the corporation s 437b deals with the agent working as a general administrator and, in this situation, the agent works on behalf of the company and has the power to act. Where a corporation or association has "managed" or has shown a person to be able to act on behalf of itself. Lynch was considered to be a lawyer for a corporation because his name appeared on letterheads of the business. Styff was the employee of the law firm. He was a partner of the company but a senior worker.

A third party is not able to know the true authority of the agent when dealing in business with several third parties on behalf of the company. Accordingly, they rely on the authority appearing in front of them and is also known as an apparent authority. Nonetheless, this form of authority is at danger because it could be that the agent has no power whatsoever or violates the boundaries of his authority. Apparent authority can therefore be defined as the authority that the agent appears to possess, but not given to him. It is therefore a legal relationship established by representation between the principal and the contractor.

In this case, the partner acting in two wings for Constructing Engineering (Aust) Pty Ltd v Hexyl Pty Ltd was acting under the current authority in the first place and apparent authority in the second; this outsider must, therefore, clearly form a real or apparent authority in partnership in order to make it enforceable by law in this case. Young v Lamb could be another example, in this case the renewal of rental of retail premises for operation was within the real authority of a partner; however, the other partner stated that it did not give the partner authority to regenerate the rental.

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