The Legal consequences of apparent authority for sustainable agency relationships
ENWhile sustainability is becoming an increasingly common topic in legal research, it is still a terra incognita issue in private law. However, private law does not operate in isolation (Akkermans 2020). Thus, there is already an emerging trend towards focusing on sustainability issues in individual private law studies. Sustainability is most often discussed in the context of property law (Robbie 2019), tort law (van Dijck 2019) and company law (Berg and Kawakami 2020). Meanwhile, no studies have yet been carried out on the topic of sustainability in the case of agency law. Every contemporary economic system is based on the principle of the division of labor in the production and distribution of goods and services, the legal reflection of which is the institution of agency (Müller-Freienfels 2018). Civil legal relations cannot be conceived without the concept of agency, as the ability to participate in these relations through agents ensures freedom of economic activity (Smits 2007). The agency relationship is considered to be a fiduciary one, which implies the utmost trust between the parties to that relationship (Wendel 2020; Laby 2020; Carter 2020). One of the instruments of agency relationships that directly ensures sustainability is apparent authority (Jurkevičius and Pokhodun 2018). The essence of apparent authority is that, without any formal procedure, the principal is legally bound by the actions of an unauthorized agent if certain circumstances imply that the principal has contributed to the third party’s justified belief that the agent has acted within the scope of the authority granted to them (Tsiura 2017). Apparent authority is one of the cases when the principal is liable by the actions of an unauthorized agent. Therefore, apparent authority per se is seen as a means of ensuring sustainability in agency and safeguarding the legitimate interests of the subjects involved in these legal relationships.However, in separate legal systems, different legal consequences of apparent authority are applied. The aim of this research is to investigate whether the current rules of agency law on apparent authority provide sufficient incentives and possibilities for sustainable action, or whether these rules need to be changed. This research will focus on the analysis of the legal consequences of apparent authority in order to determine how the balance between the rights and legitimate interests of all the entities involved in the agency relationship (i.e., the principal, the agent and third parties) is ensured. The author has chosen the Republic of Lithuania as the primary jurisdiction for the analysis, as it is one of the few countries in the world that expressis verbis has the doctrine of apparent authority in its positive law. Using a comparative approach as the main method of data analysis in this chapter, the legal consequences of apparent authority are also discussed in the context of the major jurisdictions – Germany, France and the UK – as well as in soft law instruments. [Extract, p. 137-138]
