In real estate and agency law, ostensible authority refers to the authority that a third party reasonably believes an agent possesses based on the actions or omissions of the principal. It arises when the principal’s conduct creates the appearance that the agent is authorized to act on the principal’s behalf.
Even if the agent lacks actual authority, the principal may still be bound by the agent’s actions when ostensible authority exists. This doctrine protects third parties who rely in good faith on the apparent authority created by the principal’s behavior.
