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A design firm let a project lead attend client meetings, send proposals on firm letterhead, and sign prior small change orders that the firm performed. The lead then signed a larger change order with the same client.
Which rule best governs the client's apparent-authority argument?

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Apparent authority exists whenever the agent privately believes she has authority. Apparent authority exists whenever the agent tells the third party she is authorized, even if the principal did nothing to support that belief. Apparent authority must be based on the principal's conduct causing or allowing the third party reasonably to believe the agent has authority. Apparent authority is available only for contracts under $500.

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