actual authority (2024)

FAQs

Actual authority? ›

Actual authority is an agent's power to act on behalf of a principal, because such power was expressly or impliedly conferred. Express actual authority is when a principal directly tells the agent that they have the authority to take certain action.

Two types of actual authority are expressed and implied. Expressed actual authority means that the principal has officially verbally told or expressed to the agent that he/she has permission to act on their behalf. For example, you are hired as a salesperson by a flower shop.

From the above passage, it is clear that actual authority depends upon the agreement between the principal and the agent, whereas apparent authority depends upon the representation made by the principal to the third party.

Actual authority refers to specific powers, expressly conferred by a principal (often an insurance company) to an agent to act on the principal's behalf. This power may be broad, general power or it may be limited special power. Specific powers are also known as "express authority."

Actual authority includes express authority and implied authority (not to be confused with implied appointment, that is, appointment by estoppel). Express authority is the authority which the principal has expressly given to the agent whether orally or in writing.

Actual authority is an agent's power to act on behalf of a principal, because such power was expressly or impliedly conferred. Express actual authority is when a principal directly tells the agent that they have the authority to take certain action.

When a principal grants an agent express authority to complete a task, they also grant that agent authority to take any steps reasonably necessary for the completion of that task. For example, if a principal asks an agent to take his car to the mechanic, the agent has the implied authority to drive that car.

Eng'rs v. Hydrolevel, 456 U.S. 566 (1982), the Supreme Court upheld apparent authority as a legitimate doctrine under agency law, holding, "Under general rules of agency law, principals are liable when their agents act with apparent authority . . .

Apparent agency will require three elements: 1) an act by the apparent agent or his principal justifying a belief that an agency relationship exists, 2) the principal has knowledge of the general circ*mstances, and 3) a third party is reasonably relying on his belief in the apparent agency relationship.

Actual authority refers to specific powers that are conferred by a principal onto an agent. The agent then acts on the principal's behalf. There are two sub-types that fall under actual authority: express and implied.

What is an example of apparent authority in insurance? ›

Companies can be held legally liable for things that are expressed under apparent authority. For example, if a customer service agent who is not authorized to provide insurance gives a quote to a customer, then the insurance company could be forced to sell the policy at the quoted price.

For example, if a principal gives an agent the authority to sell a property, and the successful sale of the property requires the agent to sign a contract, then the agent has inherent authority to sign the contract on behalf of the principal.

For example, if a principal hires an agent to sell their house, the agent has real authority to sign the contract on behalf of the principal if the principal has given them express or implied authority to do so.

Thus, the principal is legally bound by the act of the agent, but by exceeding actual authority, the agent has violated the duty of obedience and is liable to the principal for any resulting loss.

express authority and implied authority. Express authority is actual authority that the principal has manifested to the agent in very specific or detailed language.

the group of people with official legal power to make decisions or make people obey the laws in a particular area, such as the police or a local government agency: I'm going to report these potholes to the authorities. A good teacher has an easy authority over a class.

Authority refers to the legal and formal right to give commands and make decisions. For example, a manager has the authority to revise employees' work schedules based on the needs of the company.