Which types of authority do agents typically have?

Agents typically have three types of authority that are crucial for their role in representing a principal: express, implied, and apparent authority.

Express authority is clearly defined and explicitly given by the principal, either in writing or verbally. This type of authority outlines specific tasks and responsibilities the agent is allowed to perform on behalf of the principal. For example, a real estate agent may have express authority to negotiate and sign contracts for property sales.

Implied authority is derived from the express authority, allowing agents to perform actions that are necessary to fulfill the duties specified in their express authority. This means that even if certain powers are not explicitly granted, agents can still take actions that are reasonably necessary to carry out their express responsibilities. For instance, if an agent has express authority to sell a car, they may also have implied authority to negotiate trade-ins or arrange for vehicle inspections.

Apparent authority arises when a principal’s actions give third parties the belief that the agent has authority, even if the agent does not have actual authority. If a principal allows an agent to act in a way that suggests they have certain powers, third parties may rely on that representation. For example, if a company allows a sales agent to represent it at trade shows, customers may assume the agent