3 The Actual Authority of the Agent

Abstract

This chapter is an overview of the ‘actual authority’ of the agent. ‘Actual authority’ refers to authority the agent possesses either because the principal has expressly conferred that authority upon the agent (‘express actual authority’) or because the law regards the authority as having been conferred upon the agent by necessary implication (‘implied actual authority’). It is famously defined as a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. As a practical matter, the ‘actual authority’ of an agent is customarily contrasted with an agent’s ‘apparent authority’—that is to say, the legal relationship as between principal and third party created by a representation, made by the principal to a third party, intended to be and in fact acted upon by the latter. The chapter then goes on to elaborate the pertinent elements of express and implied actual authority.