Which types of authority do agents typically have?

Agents typically operate under three recognized types of authority: express, implied, and apparent.

Express authority is explicitly granted to an agent by the principal, often in written form, which clearly outlines the agent's responsibilities and limitations. For example, a principal may sign a contract that designates specific powers to the agent.

Implied authority arises from the nature of the agent's position and the necessity of carrying out the tasks assigned. This authority is not explicitly stated but is essential for the agent to fulfill their duties effectively. For instance, if an agent is hired to sell a product, they would have implied authority to negotiate contracts necessary for that sale.

Apparent authority occurs when a third party reasonably believes that the agent has authority to act on behalf of the principal, even if the agent does not actually have the power to do so. This can happen if the principal's actions or inactions lead the third party to think the agent is authorized, which can create liability for the principal if the agent acts beyond their actual authority.

These distinctions are essential in the context of agency relationships, as they establish the legal scope of an agent’s actions and the implications for both agents, principals, and third parties involved in transactions.