Final answer:
The situation where a principal gives a third party reason to believe someone has authority to act on their behalf is called apparent authority. This differs from actual, implied authority, and ratification. Max Weber's classification of authority is also instrumental in understanding the different foundations of authority.
Step-by-step explanation:
When the principal gives a third party reason to believe that another person is his agent, even though that person is unaware of the appointment, this situation is referred to as apparent authority. Apparent authority arises when a principal's actions or inactions give rise to a reasonable belief in a third party that another person is authorized to act on the principal's behalf, even if there is no actual authority granted. This concept is different from actual authority, which is the express and direct authority given to an agent by a principal, and also distinct from implied authority, which is the authority an agent has by virtue of being reasonably necessary to carry out his express authority. Ratification occurs when a principal approves or confirms an act done by another who did not have authority to act in the first place.
Max Weber, an economist and sociologist, developed a classification system for authority, identifying three types of authority: traditional, charismatic, and legal-rational authority. Weber's theory helps explain how authority is not solely based on formal positions but can also stem from tradition and personal qualities. In modern society, authority is a complex structure, which includes not only legal systems but also unwritten rules and cultural standards.