Apparent Authority for Acts Beyond an Agent's Granted Power

Plain-language explanation

Article 110 protects a third party who deals with an agent who oversteps the authority actually granted to them—so long as the third party had good, reasonable grounds to believe the agent had that authority. It works by applying the same logic as Article 109, paragraph 1 (apparent authority based on a representation that authority was granted), but to situations where the agent did have *some* real authority, just not enough to cover the specific act performed.

For example, imagine a company's accounting staffer is authorized to approve payments only up to ¥1 million, but signs a ¥5 million contract on the company's behalf. If the counterparty reasonably believed—based on the staffer's title, past dealings, use of a company seal, or business cards—that this person had authority to make such a deal, the company may not be able to void the contract simply by pointing out it exceeded the staffer's actual authority. The law effectively holds the principal (the company) responsible for the appearance of authority it allowed to exist.

Two elements are essential: (1) the agent must have had *some* underlying authority to begin with (this doesn't apply to someone with zero authority at all—that's a different, harsher rule), and (2) the third party's belief must be reasonable and made in good faith, without negligence. If the third party knew or should have known the agent was overstepping, they lose this protection. For businesses, the practical takeaway is to clearly define and communicate the scope of authority given to employees and agents—through powers of attorney, internal policies, and careful control over titles, seals, and business cards—to avoid being unexpectedly bound by unauthorized deals.

日本語での解説

Common scenarios

• ▸従業員が会社から与えられた金額上限を超えて契約を締結してしまった場合
• ▸支店長や営業担当者が本社の承認なしに通常業務を超える取引を行った場合
• ▸代理権の範囲が曖昧なまま第三者と交渉・契約が進んでしまった場合
• ▸退職済みまたは異動済みの担当者が旧来の名刺や印鑑を使って契約を結んでしまった場合
• ▸委任状に記載のない事項について代理人が独断で契約した場合