What are the three types of authority an agent can hold?

An agent can hold three types of authority, which are essential for understanding how agents operate within the bounds of their relationship with the principles they represent. These types are express, implied, and apparent authority.

Express authority refers to the specific powers that are formally granted to an agent through a written or verbal agreement. This authority is clearly articulated, leaving no ambiguity about the actions the agent can take on behalf of the principal.

Implied authority encompasses the powers that are not explicitly stated but are necessary for the agent to perform their duties effectively. This type of authority arises from the nature of the task assigned to the agent and is presumed to be granted unless there is clear evidence to the contrary. For example, if an agent is given express authority to manage a property, they likely also have implied authority to hire maintenance personnel to keep that property in good condition.

Apparent authority is a bit different, as it arises when a principal creates the perception that an agent has authority, even if that authority has not been expressly granted. If a third party reasonably believes that an agent has authority based on the principal's actions or statements, the principal may still be bound by the agent's actions, despite the lack of express or implied authority.

Understanding these three types of authority