The authority a principal intends to grant to an agent by means of the agent's contract is called what?

The authority a principal intends to grant to an agent by means of the agent's contract is called what?

• A. The law of agency
• B. Implied authority
• C. Apparent authority
• D. Express authority

Answer: (D)

Express authority is the authority a principal intentionally gives to an agent through the contract, stated clearly in writing or spoken terms. It comes directly from the principal’s instructions and defines exactly what the agent is authorized to do on the principal’s behalf. Because this authority is created by the contract itself, the agent can act within those explicit boundaries with confidence that the principal will be bound by their actions. If the agent stays within the defined scope, the principal is legally responsible for the agent’s actions to third parties. Other forms of authority aren’t granted directly by the contract: implied authority arises from the duties of the role and what’s necessary to carry out express tasks, while apparent authority comes from how others perceive the agent’s power based on the principal’s representations. The law of agency covers all these ways relationships and authority are formed.

Express authority is the authority a principal intentionally gives to an agent through the contract, stated clearly in writing or spoken terms. It comes directly from the principal’s instructions and defines exactly what the agent is authorized to do on the principal’s behalf. Because this authority is created by the contract itself, the agent can act within those explicit boundaries with confidence that the principal will be bound by their actions. If the agent stays within the defined scope, the principal is legally responsible for the agent’s actions to third parties. Other forms of authority aren’t granted directly by the contract: implied authority arises from the duties of the role and what’s necessary to carry out express tasks, while apparent authority comes from how others perceive the agent’s power based on the principal’s representations. The law of agency covers all these ways relationships and authority are formed.