Express, Implied, and Apparent Authorities

Creation of Actual Authority Involves:

1) An objective manifestation by the principal 2) Followed by the agent's reasonable interpretation of that manifestation 3) Which leads the agent to believe that it is authorized to act for the principal

Implied Authority

Subset of Actual Authority. Relationship can be implied by the nature of the parties. Incidental authority to get the job done. Does not grant authority to undertake unusual or extraordinary actions. Look at reasonableness and course of dealing to see how far the implied authority goes. AKA inherent authority.

Express Authority

Subset of Actual Authority. The strongest type of authority. Often in written form. The principal consents to the agent's actions, and the third party may rely on the document attesting to the agent's authority to deal on behalf of the principal. Usually, a third party is entitled to rely on the express authorization given to its agent.

Actual Authority

The agent's actions in dealing with third parties affects the legal rights of the principal. What the third party knows about the agency agreement is irrelevant to the agent's legal authority to act. That authority runs from the principal to the agent. As long as the agent has authorization, either express or implied, she may bind the principal legally.

Contractually Binding the Principal Through Actual Authority

The principal is bound to the contract through an agent acting with actual authority. In almost all circumstances, the third party is also bound. However there are special rules for undiclosed principals where the third party is sometimes entitled to insist on rendering performance to the agent or escape the contract entirely.

Apparent Authority

Whether the third party reasonably believes from the principal's words, written or spoken, or from his conduct, that he has consented to the agent's actions. A manifestation of authority communicated to the third person; it runs form principal to third party, not to the agent. When the principal gave the third party reason to believe that the agent had authority. Sometimes said to be based on the idea of estoppel. The express manifestations of the principal can always negate implied authority. Apparent authority to bind. Created when a principal says or does something that makes a third party reasonably believe that the agent is authorized by the principal to deal with the third party.

Mechanics of Apparent Authority

Creation of apparent authority invovles: 1) an objective manfiestation from one party ("apparent principal") 2) which somehow reaches a third party 3) which causes the third party to reasonably belive that another party ("apparent agent") is authorized to act for the apparent principal.