Apparent authority and protection of third parties’ interests in transactions with corporate agents

Abstract

In principle, a principal is bound by the agreements made by their agents only within the scope of the agent's authority. However, there are many cases where a relationship between a third party and an agent is established even when the agent either has no authority, exceeds their authority or no longer has authority because the agent has been granted “aparent authority” by the principal, creating trust in the third party in establishing the transaction. To promote fairness, protect third parties, safeguard the interests of principals, and maintain legal stability and safety in trade exchanges, lawmakers should approach the development of legal provisions regarding agency with caution. This study suggests that several of Vietnam’s legal provisions should be amended or supplemented to ensure transparency regarding the authority of corporate agents. Additionally, it is essential to formally recognise the concept of apparent authority for corporate agents.