In a principal-agent relationship, the principal gives the agent authority to act on behalf of the principal, and to bind or obligate the principal to contracts and other legal obligations, as permitted by the scope of the agency (authority). An agent’s authority may be sufficient to bind or obligate the principal if the authority was expressly given to the agent (actual authority), or if it was implied to other persons that the agent had authority to act on behalf of the principal (apparent authority)—such as by the principal’s adoption of the agent’s prior actions on behalf of the principal.

In Nebraska, as in other states, the principal-agent relationship is governed by principles of agency law. The principal grants the agent the authority to act on their behalf within the scope of the agency. This authority can be actual authority, which is explicitly given to the agent by the principal, either in writing or verbally, to perform certain acts or conduct transactions. Apparent authority, on the other hand, arises when a principal's conduct leads a third party to reasonably believe that the agent is authorized to act, even if the agent does not have actual authority. This can occur if the principal knowingly allows the agent to act in a certain way or fails to correct the impression that the agent has certain powers. In Nebraska, if an agent has either actual or apparent authority, they can bind the principal to contracts and other legal obligations. It is important for principals to clearly define the scope of an agent's authority and for third parties to verify the extent of an agent's authority to avoid disputes. An attorney can provide specific advice on creating and managing principal-agent relationships in accordance with Nebraska law.