What is an ostensible agent?

An ostensible agent refers to an individual who is not formally employed by the principal but is perceived by a third party to have authority to act on behalf of the principal. This perception creates an assumption that the agent is authorized to make decisions or enter into agreements, even if the individual does not hold a formal position or employment relationship with the principal.

The key component here is the belief of third parties; they operate under the assumption that the ostensible agent has the necessary authority because of the principal's actions or representations. Consequently, the principal may be held liable for the actions of the ostensible agent in situations where a third party relies on this assumed authority.

The incorrect choices revolve around definitions that are too narrow or different from the concept of ostensible agency. A direct employee of the principal has a formal employment relationship; an assistant agent usually works under the direction of a principal agent but does not imply the same perception of authority by third parties; and an independent contractor usually operates under separate terms and typically lacks the same liability implications for the principal regarding ostensible authority.