dissenting.
I dissent to Part II of the Majority Opinion. Part II involves two classes of teachers — those who filed grievances with their principals and those who did not. As to the remainder of the Majority Opinion, I concur in result with Parts I, III, and IV.
I.
Teachers Who Filed Grievances
The resolution of this issue turns upon whether the school principals were actual or apparent agents of the Board of School Trustees of the Prairie Heights Community School Corporation. The majority resolves this question in the negative; I must respectfully disagree.
The term “actual agency” describes a relationship which has the following three attributes: 1) manifestation of consent by the principal; 2) acquiescence by the agent; and 3) control exerted by the principal. Hope Lutheran Church v. Chellew (1984), Ind.App., 460 N.E.2d 1244, 1247, transfer denied. An agent can bind his principal within the scope of his actual authority. An individual can also have “apparent authority” to bind a principal if a third person reasonably believes he has that authority because of some manifestation made to the third party from the principal which instills the third person with a reasonable belief that the individual is acting for the principal. Pepkowski v. Life of Indiana Ins. Co. (1989), Ind., 535 N.E.2d 1164, 1166-1167. It is essential that there be some form of communication by the principal, direct or indirect, which instills a reasonable belief in the mind of the third party. Id. at 1167.
The majority concedes the accuracy of the following passage from Am.Jur. cited by the plaintiff teachers and quoted at footnote 8 of the majority opinion:
Stated in terms of estoppel, the rule is that where a principal has, by his voluntary act, placed an agent in such a situation that a person of ordinary prudence conversant with business usages and the nature of the particular business is justified in assuming that such agent has authority to perform a particular act and deals with the agent upon that assumption, the principal is estopped as against such third person from denying the agent’s authority; he will not be permitted to prove that the agent’s authority was, in fact, less extensive than that with which he was apparently clothed.
3 Am.Jur.2d, Agency § 81.
Here, the master contract between the Board of School Trustees of the Prairie Heights Community School Corporation and the Prairie Heights Education Association (Master Contract), incorporated by reference in the Special Education Agreement, conferred authority upon the school principals to act as grievance officers in their schools. Clearly, this is a manifestation made to the teachers, who possessed copies of the Master Contract and instituted their grievance procedures under it pursuant to the directive of the Special Education Agreement.
The majority holds, however, that in this case the principals (here, interestingly, the *296agents for purposes of agency law) did not have apparent authority to bind the School Board (here the principal for purposes of agency law) because the principals were not authorized to fix and pay salaries by statute. The teachers are charged with knowledge of this statutory provision. Therefore, the majority concludes that “[tjeachers of ordinary prudence, conversant with teaching usages and the nature of teaching practices, cannot justifiably assume that a school principal has authority to alter the terms concerning the amount of pay of their teaching contracts.” At 293.
The Special Education Agreement provides that the teachers in question “shall file grievances through the procedures as outlines [sic] in the Mater [sic] Contract of their local school corporation.” Record, p. 361. The Master Contract defines a “grievance” as “a claim by one or more teachers that a clause, provision or article of this Agreement has been violated or misapplied in such a way as to personally and adversely affect the teacher or group of teachers.” Record, p. 358. Logically, a grievance for the special education teachers would include claims of violation of the Special Education Agreement; if it did not, it would render the grievance clause in the Special Education Agreement superfluous. We construe the language in a contract so as not to render any words, phrases or terms ineffective or meaningless. Bicknell Minerals, Inc. v. Tilly (1991), Ind.App., 570 N.E.2d 1307, 1316, reh’g denied. Thus, the School Board through the master contract has conferred authority upon the principal as a grievance officer to interpret the contracts. The principals here were performing that duty when they awarded the balance of the teachers' salaries to them.
The principals were not “fixing” or “paying” the salaries of the teachers within the meaning of IC 20-5-2-2. The salaries had already been fixed by the School Board when it entered into the Special Education Agreement with the other school corporations permitting the teachers to retain the salary schedule and insurance package of the previous year if they wished. It is true that the Agreement does not contain the specific salary figures,1 but it incorporates by reference the master contracts of the various school corporations, which do contain the applicable figures. The principals’ task, which they performed correctly, was simply to examine the Special Education Agreement in conjunction with the Master Contract to ascertain the proper salary figure. Thus at the very least the principals had apparent authority to redress the teachers’ grievances, and the School Board is estopped from denying their authority to bind it.
II.
Teachers Who Did Not File Grievances
In my view, the teachers affected by the 1984-1985 Special Education Agreement who did not file grievances are also entitled to relief. These teachers are clearly third-party beneficiaries of the Agreement. As such, they may directly enforce the contract. Mogensen v. Martz (1982), Ind.App., 441 N.E.2d 34, 35.
The Special Education Contract provides: [I]f a teacher is changed from one school corporation to another without changing categories, the teacher shall be retained, at the teacher’s option, to the salary schedule and insurance package of the school corporation where he/she was assigned the previous year.
Record, p. 361. No mention was made in the 1984-1985 Special Education Agreement of pro-ration of salaries for Category A and B teachers.2 Nor do the salary schedules mention pro-ration of salaries. I would hold that the clear and unambiguous intent of the Agreement was to allow the *297teacher to recover the full salary figure set out in the salary schedule in the applicable master contract.
In sum, I would reverse that portion of the trial court’s judgment dealing with the disputed salary figures for the 1984-1985 school year. I would affirm in all other respects.
. Indeed, an enumeration of salary figures would be well nigh impossible. In addition to the traditional variables (education and seniority), the possible salary of the individual special education teacher depends upon which of the many school corporations at which the teacher was last employed and which school at which he or she is currently employed.
. In subsequent years, a provision for pro-ration of salaries was added to the Special Education Agreement, which was renewed each year.