PJC Business

PJC 101.15

C ONTRACTS

PJC 101.15 Instruction on Authority A party’s conduct includes the conduct of another who acts with the party’s authority or apparent authority. Authority for another to act for a party must arise from the party’s agreement that the other act on behalf and for the benefit of the party. If a party so autho rizes another to perform an act, that other party is also authorized to do what ever else is proper, usual, and necessary to perform the act expressly authorized. Apparent authority exists if a party (1) knowingly permits another to hold himself out as having authority or, (2) through lack of ordinary care, bestows on another such indications of authority that lead a reasonably prudent person to rely on the apparent existence of authority to his detriment. Only the acts of the party sought to be charged with responsibility for the conduct of another may be considered in determining whether apparent authority exists. COMMENT When to use. PJC 101.15 may be appropriate if the evidence raises a question of express, implied, or apparent authority. It is to be used only to determine whether a party is contractually bound by the conduct of another. In common-law tort and statu tory actions, where the issue is a party’s vicarious liability for the wrongful conduct of another, different rules of law may apply. For the rules relating to deceptive trade prac tices and insurance actions, see the comments titled “Vicarious liability” at PJC 102.1, 102.7, 102.8, and 102.14. Express authority. Express authority arises from the principal’s agreement that the agent act on the principal’s behalf and for his benefit. Clark’s-Gamble, Inc. v. State , 486 S.W.2d 840, 845 (Tex. App.—Amarillo 1972, writ ref’d n.r.e.) (upholding charge submission that an “agent is one who acts in behalf of another under the latter’s authority and for the latter’s benefit”); see Gaines v. Kelly , 235 S.W.3d 179, 183–84 (Tex. 2007) (an agent’s authority to act on behalf of a principal depends on some com munication by the principal to the agent). Implied authority. Implied authority arises by implication from a grant of express authority. A grant of express authority implies authority to do those acts proper, usual, and necessary to perform the act expressly authorized. Nears v. Holiday Hospitality Franchising, Inc. , 295 S.W.3d 787, 795 (Tex. App.—Texarkana 2009, no pet.). Apparent authority. Apparent authority, which is based partly on estoppel, may arise from two sources: first, from the principal’s knowingly allowing an agent to

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