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 South Carolina, as in other states, the principal-agent relationship is governed by common law principles of agency, which may be supplemented by state statutes. The principal gives the agent authority to act on their behalf, which can include entering into contracts and incurring other legal obligations within the scope of the agency. An agent's authority to bind the principal can be 'actual authority,' which is the power granted by the principal to the agent either explicitly or implicitly. 'Apparent authority' occurs when a third party reasonably believes the agent has the authority to act on behalf of the principal, based on the principal's representations or conduct. South Carolina courts will look at the interactions between the principal, agent, and third parties to determine if apparent authority exists. This can include the principal's acquiescence or ratification of the agent's actions. It's 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 power to bind the principal in South Carolina.