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According to the general rule explaining apparent authority, if the behaviour of a principal gives reasonable grounds for the third party to think that the principal has appointed the other person to be his agent, contracts concluded by the third party in the principal’s name shall be binding on the principal, notwithstanding the fact that the agent was not authorised by the principal to conclude particular contracts. In the absence of evidence of apparent authority the agent shall have to redress the damage incurred on a third party in cases where the third party was not aware, and was under no obligation to be aware, of circumstances that the person acted in other person’s name without their express authorisation or in excess of their authority. The principal shall be liable for actions of the apparent agent if the following three requirements are proven: words or conduct of the principal caused the impression of authority; third party could reasonably presume the existence of sufficient authority; third party acted in good faith. The third party’s legitimate expectations must be aligned with the principal’s will in order to apply the doctrine of apparent authority efficiently. It is important to distinguish apparent authority from other types of authority, in particular, implied authority. Implied authority arises from circumstances in which the agent operates and is considered as a part of real authority. Contrary to apparent authority, legal actions carried out by the agent on the basis of implied authority are considered within the mandate. As stated in the Lithuanian legal doctrine and court practice, the second paragraph of Article 2.133 of the Lithuanian Civil Code stands for implied agency and paragraph 9 of the same Article explains apparent authority. Such understanding is subject to doubts, especially taking into consideration the legal doctrine in foreign countries. In this article the authors also explain the conceptions on which apparent authority is based, the content of particular requirements for apparent authority and the legal consequences that each party (i.e. the principal, the agent, and the third party) faces in case of apparent authority. The case-law of Lithuanian courts is considered as well.
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