dissenting:
This case has serious implications for the relationships between the United States *197and all foreign states that send duly accredited ambassadors to head their diplomatic missions in this country. Because I believe the majority has fashioned a rule of law that risks impairment of those relationships, I respectfully dissent.
Though the case comes to us after entry of a default judgment, certain key facts are undisputed. In 1983, Lloydstone Jacobs was an Ambassador Extraordinary and Plenipotentiary of the Government of Antigua and Barbuda and the Permanent Representative of that government to the United Nations. He headed the Antiguan Mission to the UN in New York City. Ambassador Jacobs signed a note for the repayment of money borrowed from what is now known as the First Fidelity Bank. The note states that the borrower is the “Government of Antigua & Barbuda — Permanent Mission.” Ambassador Jacobs represented that the loan proceeds were to be used for renovations at his government’s UN Mission and its New York City tourist office. He subsequently used the funds for construction of a casino resort in Antigua, in which he and other officials of the Antiguan government held ownership interests. Antigua contends that under the An-tiguan Constitution and statutes, the authority to borrow funds requires the prior approval of the cabinet and a delegation of authority to the Minister of Finance, and that neither had occurred in this case. For purposes of this appeal, I accept that contention.
Litigation brought by the Bank to collect the loan resulted initially in a default judgment against the Government of Antigua and Barbuda and subsequently in a stipulation of settlement, which was “so ordered” by the District Court. The stipulation contained an express waiver of the immunity of Antigua from the jurisdiction of the courts of the United States under the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1604, 1605(a)(1) (1982). The stipulation was signed on behalf of Antigua by Jacobs in his capacity as Ambassador Extraordinary and Plenipotentiary and by an attorney representing Antigua.
The majority directs that the default judgment be vacated and that the District Court conduct an inquiry into whether the Bank was entitled to rely on the apparent authority of Ambassador Jacobs to borrow the money and to settle the ensuing litigation. In that inquiry, Antigua will be entitled to a dismissal of the Bank’s claim on the basis of sovereign immunity if it can establish “that Antigua is the innocent victim of its ambassador’s fraud and the bank’s willful ignorance of the ambassador’s lack of authority.” 877 F.2d at 195. The majority decides the case by rejecting the proposition that Antigua is bound by the actions of its Ambassador solely by virtue of his office and by concluding that the only inquiry left once that proposition is rejected is whether Antigua is bound under the doctrine of apparent authority.
The initial question concerns choice of law. Though foreign states, if amenable to suit in this country, may, in most circumstances, be obliged to accept state substantive law that normally applies to such matters as contracts and creditors’ rights, they are entitled to expect that this country will have a uniform body of federal law that determines those issues of agency law that implicate relationships between a foreign government and its ambassador accredited within this country. In this respect, it should make no difference that Jacobs was his country’s Ambassador to the UN, rather than to the Government of the United States. As the host country to the United Nations headquarters, this country has an obligation to develop federal law on the sensitive subject of a UN ambassador’s authority to bind his government on ordinary commercial matters. In the absence of federal legislation on the subject, the matter is appropriate for the development of federal common law. Cf. First National City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U.S. 611, 623, 103 S.Ct. 2591, 2598, 77 L.Ed.2d 46 (1983) (federal common law is appropriate for deciding whether separate juridical status of foreign state’s instrumentality should shield it from liability).
Turning, then, to the issue of agency law, as a matter of federal common law in *198this context, I can agree with the majority that a person’s role as his country’s UN ambassador does not automatically entitle him to bind his government in all cases. For example, that role would not entitle an ambassador to bind his government to an obligation collusively entered into between the ambassador and a third party for the third party’s benefit. Nor would the foreign government automatically be bound when its ambassador contracts, without actual authority, as to matters far removed from the routine functioning of a diplomatic mission.
However, the fact that an ambassador’s office does not suffice to authorize him to bind his government in all cases does not inevitably lead to a conclusion that only apparent authority furnishes the appropriate standard whenever, as here, the ambassador/agent lacks actual authority from his government/principal. In addition to actual authority, which may be lacking in this case, and apparent authority, which is now to be explored on remand, there exists what the Restatement of Agency calls “Inherent Agency Power”:
Inherent agency power is a term used in the restatement of this subject to indicate the power of an agent which is derived not from authority, apparent authority or estoppel, but solely from the agency relation and exists for the protection of persons harmed by or dealing with a servant or other agent.
Restatement (Second) of Agency § 8A (1958).
Though the circumstances of the government-ambassador relationship are not precisely within the examples of inherent agency power set forth in the Restatement, id. comment b, that relationship is especially suitable for application of this doctrine. An ambassador is accredited to another country so that he will be his government’s representative in that country. We are not concerned in this case with the extent of his authority to commit his government on matters of international affairs.1 Instead, our context concerns only actions of an ambassador dealing with third parties on ordinary commercial matters ostensibly of benefit to his government’s ability to maintain its presence in this country. In that context, whether to bind a government by the actions of its ambassador, under the doctrine of inherent agency power, poses this choice: Will the relationships between our government and foreign governments be better served by ensuring that an ambassador can promptly obtain the goods and services needed to operate his embassy or mission, even if on occasion a foreign government is held responsible for incurring obligations his government neither authorized nor con*199dones, or by obliging third parties who supply such goods and services to ascertain from the foreign government in each instance whether the ambassador has actual authority. The latter option strikes me as the one to be avoided.
Though the Government of Antigua may find it preferable to tolerate an inquiry into its ambassador’s authority in this case if it will thereby obtain a chance to avoid liability for the funds he borrowed, foreign governments generally will not appreciate inquiries from American vendors as to the authority of their ambassadors to obtain goods or services. They send their ambassadors here, as we do to their countries, in the expectation that they can carry out the normal incidents of living in the host country. There is nothing extraordinary about borrowing money to refurbish an embassy, or in this case, a UN mission. And how is the vendor to avoid all risk? It cannot obtain a routine resolution of borrowing authority from a corporation’s board of directors. Must it inquire of the foreign ministry, the parliament, the head of state? Or should it examine the internal legal regulations that govern the purchasing and borrowing authority of each country’s ambassadors? None of these alternatives seems likely to promote this country’s relationships with foreign states.
Under the majority’s approach, the third party’s reliance on the apparent authority of an ambassador remains available, but, as the remand in this case demonstrates, it is an uncertain ground of support. A third party who supplies an embassy (or a UN mission) with champagne or credit expects payment, not an opportunity to persuade a trial court that its ignorance of an ambassador’s lack of actual authority was not willful. The majority’s unwillingness to recognize an ambassador’s inherent authority in this context will, I fear, have the unfortunate consequences of making some vendors unwilling to extend credit for goods and services ordered by embassies and impelling others to make potentially intrusive and resented inquiries of foreign governments. An ambassador may not be “l’etat” for all purposes, but in the context of purporting to obtain goods and services for his country's diplomatic mission, I believe “c’est lui” indeed.
The majority suggests that the Restatement ’s principle of inherent agency power should not apply to ambassadors because some circumstances can be imagined in which the principle would not apply. If that is a “defect” in the principle or in its application to an ambassador, it is one shared by every legal principle ever announced. In urging that the relationship of an ambassador to his government is one appropriate for the application of the inherent agency principle, I do not suggest that the transaction need not be examined to see if it is one to which the principle applies. In this case, however, there is no claim whatever by Antigua that the bank engaged in any unlawful or even questionable activities with the Ambassador, nor that the bank had any knowledge or basis for suspicion that the Ambassador was not borrowing the money for the stated purposes. Relationships with foreign governments are not put at risk by subjecting those who supply goods and services to foreign embassies to the prospect of an inquiry concerning the legitimacy of the transaction. Whenever a bank lends money, it faces the possibility of subsequent inquiry concerning the bona fides of the transaction. But relationships with foreign governments are put at risk by rules that oblige vendors to probe the relationship of an ambassador to his government in order to avoid the risk of subsequent disputes concerning the ambassador’s actual or apparent authority.
In any event, we ought not to reject inherent authority in this context without having the benefit of the views of the Executive Branch officially presented to this Court in an amicus curiae brief. We are informed that counsel for Antigua sought to have the State Department present an amicus brief in this case on behalf of Antigua, a request that was declined.
Even if this case should be governed solely by the principle of apparent authority, rather than inherent agency power, I fail to see why the judgment of the District Court should not be affirmed. In seeking *200to vacate the default judgment, Antigua has made no claim nor produced any affidavit that puts in issue the reasonableness of First Fidelity’s reliance on the apparent authority of Ambassador Jacobs at the time the funds were borrowed. Any information that First Fidelity may have acquired concerning the need for explicit authorization for the loan from the Antiguan government came to its attention in the course of trying to collect the loan, long after the loan agreement was signed. Since Jacobs indisputably had the apparent authority to bind Antigua to the obligation to repay the funds and since sovereign immunity is not a defense to liability for this commercial transaction, 28 U.S.C. § 1605(a)(2), Antigua should be bound by Jacobs’ action in borrowing the funds and by the subsequent default judgment entered upon the repayment obligation.
For these reasons I respectfully dissent.2
. Thus, with deference, I suggest that the majority’s citation to cases and to those passages of the Restatement of Foreign Relations concerning actions of an ambassador in the arena or international agreements between nations have little, if any, relevance to this case. It may be entirely appropriate, as the Permanent Court of International Justice held, to examine the entire context in which a foreign minister’s disclaimer of sovereignty over disputed territory is made. Legal Status of Eastern Greenland (Den. v. Nor.), 1933 P.C.I.J. (ser. A/B) No. 53 (Apr. 5). And, even in the context of international agreements, the examples cited by the majority do not cast doubt on the appropriateness of binding a government by its ambassador’s ordinary commitments to third parties ostensibly made in the course of carrying on the affairs of his diplomatic mission. The coercion of a state's representative, cited in section 331(2)(a) of the Restatement as grounds for permitting a state to invalidate its consent to an international agreement, is simply an example of a defense that is available to a principal because its agent has not acted under circumstances in which the law attaches consequences to his actions, let alone those of his principal. The example of a representative of a negotiating state corrupted by a party to the negotiation, cited in section 331(l)(c) of the Restatement, also has no bearing on whether the law of this country ought to bind governments when their ambassadors deal with third parties on ordinary commercial matters.
The majority maintains that because international agreements have “more dignity" than Ambassador Jacobs’ commercial transactions with First Fidelity, the binding effect of his signature on the loan agreement and the stipulation must be less than would arise from his signature on an international agreement. 877 F.2d at 192. I should think the “dignity" factor has precisely the opposite effect. A foreign state needs more insulation when its ambassador purports to commit it to an international treaty than when he orders groceries or borrows money to renovate a diplomatic mission.
. Because I would affirm on the basis of Ambassador Jacobs’ inherent authority to borrow the funds and to consent to a judgment settling the claim for collection, I need not consider whether Antigua became bound solely because the stipulation settling the litigation was signed by a lawyer purporting to'represent the Government of Antigua.