What is a characteristic of 'apparent authority'?

Apparent authority is a legal concept that arises when a principal's conduct leads a third party to reasonably believe that an agent has the authority to act on the principal's behalf. This form of authority does not depend on an explicit agreement between the principal and the agent but rather on the perceptions created by the principal's actions.

In practice, if a principal allows an agent to behave in a manner that suggests they have authority, it creates a reasonable basis for third parties to rely on the agent's representations. For instance, if a business consistently allows an employee to negotiate contracts on its behalf without any restriction, customers may believe that the employee has the authority to bind the business in such dealings. Hence, the principal is held accountable for the agent's actions as long as the third parties were justified in their belief regarding the agent's authority.

The other options do not accurately depict the nature of apparent authority. Documentation is not a requirement; personal relationships do not inherently establish apparent authority; and it is possible for apparent authority to be created intentionally through the principal’s actions.