What are the three types of agent authority?

Agent authority is recognized in three distinct forms: express, implied, and apparent.

Express authority is the most straightforward type, where the principal explicitly outlines the powers granted to the agent, often in written form through a contract. This explicit communication ensures that the agent knows precisely what actions they can take on behalf of the principal.

Implied authority, on the other hand, is not explicitly stated but is derived from the actions, conduct, or the nature of the relationship between the agent and the principal. This means that certain powers can be inferred, allowing the agent to perform actions that are necessary to carry out their express authority, even if those actions were not clearly defined.

Apparent authority occurs when a principal's behavior leads a third party to reasonably believe that the agent has the authority to act on their behalf, even if the agent does not actually have such authority. This can happen through representations made by the principal or the principal's inaction that creates an assumption of authority by the agent in the eyes of third parties.

Understanding these types of authority is crucial because they affect the legal implications of the agent's actions and the responsibilities of both the agent and the principal in various circumstances.