Legal Memorandum: Doctrine of Apparent Authority in OH

Issue: Does Ohio law recognize the doctrine of apparent authority?

Ohio recognizes the doctrine of apparent authority or "agency by estoppel."  Whitlow v. Good Samaritan Hosp., 42 Ohio App. 3d 74, 76-77, 536 N.E.2d 659, 662 (1987).  Under apparent agency, a principal is bound by the agent’s actions because the principal held out the agent to the public as having sufficient authority to engage in the particular act in question, or knowingly allowed the agent to act as if he or she had such authority, and that the person who dealt with the agent knew the facts, acted in good faith, and reasonably believed that the agent had the necessary authority for the action.  Master Consol. Corp. v. BancOhio Nat’l Bank, 61 Ohio St. 3d 570, 576, 575 N.E.2d 817, 822 (1991).  The apparent authority of an agent is determined by the act of the principal in clothing the agent with the appearance of authority, and not by the acts of the agent in creating authority.  Id., 61 Ohio St. 3d at 576-77, 575 N.E.2d at 822.  Estoppel precludes the principal from arguing that an agent’s authority was revoked, if the third person who relied upon the agent’s actions was not given notice of the alleged revocation.  Aetna Ins. Co. v. Stambaugh-Thompson Co., 81 N.E. 173, 175 (Ohio 1907) (it was reasonable to rely on the continued authority of the agent who had been involved in the transaction all along).

A person’s title can be suggestive of authority, and if the agreement at issue involves […]