Does Apparent Authority Wane?—A Problematic Question in English Agency Law

Abstract

When does a third party who has established that at some point a principal held out an agent as authorised to act for the principal lose the right to rely on that holding out? The case law on this topic in Commonwealth jurisdictions is surprisingly inconclusive and complex. The answer to the question, it is suggested, should be very simple. The third party should lose the right to rely on a holding out once it becomes unreasonable to rely on it. It is true that such a simple answer does not admit of mechanical application. But mechanical rules are no good if they frequently fail to come near to the merits of human interaction. An edited version of this paper was published in [2018] Journal of Business Law 663.