Ostensible

Definition of "Ostensible"

Written by

Mary Kay Carter

Realty One Group Freedom

We call a concept ostensible when, at first sight, it appears to be accurate or valid. However, upon closer inspection, it proves to be a half-truth or completely false. For instance, Dale calls Harry, his childhood friend, to seemingly check in for old times’ sake. The truth, however, is that Dale wanted to convince Harry to work for him in an MLM system. Dale’s reason was ostensible as apparent.

An agent can also be ostensible. Superficially, a person might have the necessary authority or jurisdiction in a particular matter. Moreover, their physical appearance (for example, their uniform) and conduct may indicate a certain degree of control. Their authority, however, vanishes at fact-checking. After all, the definition of the term ‘ostensible’ comes down to a discrepancy between an implied idea and reality.

What does ostensible mean in terms of the law?

In law, one dealing with the agent may reasonably rely on the apparent representations.

In other words, apparent in legal terms describes the false impression of having the authority to act as a genuine agent on a client’s behalf. 

Assume the principal instructs their local real estate agents not to sell a house for less than $200,000. If they sell it for $175,000 to a buyer who has reason to rely on the agent’s actions, they will legally transfer the property. The principal may bring legal charges against and sue the real estate broker for breach of contract.

Ostensible in terms of real estate

As pointed out earlier, a realtor can seemingly assume authority and act on behalf of an agency. However, the agent doesn’t have authority on this matter.

A real estate transaction presupposes several participants. One of them can easily be perceived as an apparent agent. When you don’t have enough information available, you may jump to the reasonable conclusion that one of the parties is, by definition, an ostensible agent.

Such misunderstandings may result in civil lawsuits between house sellers and buyers and liability claims against brokers and realtors. To avoid the so-called ostensible agency liability, all parties involved should demonstrate their relationship and authority with every participant. Full disclosure of present parties should be the foundation stone for the trust between a realtor and a client!

Ostensible agency

Let’s consider Jack an independent service provider, not an employee at a significant real estate agency, such as the game-changer RealEstateAgent.com. Because he wears the company’s badge, a third party is led to believe Jack represents the agency. Jack, therefore, becomes an ostensible agent. We cannot rely upon his input, and his information may not be adequate in this context.

Real-life examples

We often encounter ostensible agency in everyday life, similar to apparent authority. Typically, a person acting as an ingenuine agent will have powerful consequences. A third party will believe an ostensible agent’s apparent authority. Thus, the third party doesn’t know the relationship between the ostensible agent and the individual or agency assumed to be the client.

Also, the definition of an 'ostensible agency' applies to the following scenario. A client hires an agency or contractor to provide them with a service. However, the company delegates a subcontractor to the customer. As the subcontractor knows the assignment’s nature and doesn’t tell the truth to the client, the customer will believe that they are dealing with a genuine contractor. The subcontractor is an ostensible agent to the contractor.