What must a principal do to avoid liability for lingering apparent authority?

To avoid liability for lingering apparent authority, a principal must give timely and personal notice to third parties that the agent's authority has ended. Apparent authority arises when the principal's representations to a third party make it appear that the agent has the authority to act on the principal's behalf. If the agent’s authority is terminated but the third parties are not informed, they may reasonably assume that the agent still has the authority to bind the principal to agreements.

By providing timely and personal notice, the principal effectively communicates the termination of the agent's authority directly to those who might interact with the agent, thereby reducing the risk of relying on the agent's apparent authority. It is crucial for the notice to be personal and timely to ensure that third parties understand the current situation accurately. This direct communication helps to remove any lingering belief that the agent has the power to act, which protects the principal from potential liabilities arising from actions taken by the agent after their authority has been revoked.

General notices to the public or increasing an agent's compensation do not specifically address the need to inform third parties directly about the change in authority, and simply ensuring an agent continues to operate does not effectively eliminate the risk of apparent authority.