What is express authority?
What is the express authority definition?
What are the important elements that you must know!
We will look at what is express authority, look at its legal definition, look at examples of how an express authority may be given, the different types of authorities possible in agency law, contrast it with implied authority and apparent authority and more!!
Stick around as we’ve got definitions, examples, legal concepts and more to explain!
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What is express authority
In agency law, express authority is the type of authority where a person (or principal) expressly authorizes another person (the agent) to act on its behalf.
Express authority can be given either in writing or orally.
What’s important here is that the agent has an expressed authority to act on behalf of another, legally make representations for the other or even legally bind the principal in a contract.
Express authority can result from express power given to an agent in an agency agreement or through clear and express oral instructions.
There are typically three types of authority possible in law:
- Express authority
- Implied authority
- Apparent authority
There is also the concept of “actual authority” which is the combination of someone having both the express and implied authority to act.
When a person has express authority to act and represent another, he or she can legally bind the other person into a contractual obligation or legal commitment.
The express agent’s conduct will legally bind the principal.
Express authority definition
What is the legal definition of express authority?
According to Cornell Law School’s Legal Information Institute, express authority is defined as follows:
An agent’s power to act on behalf of a principal, explicitly granted by an agreement between the agent and principal.
In other words, you are dealing with a scenario where an individual or business entity has explicit authorization to act on behalf of another individual or business entity.
This is the basis of establishing an expressed agency under agency law.
Express authority example
Let’s look at an example of express authority in the context of insurance.
When an insurance company grants express authority to an insurance agent to find and solicit new life insurance clients, the insurance agent’s main objective will be to find prospective clients and sell them life insurance.
However, since the express authority given to the insurance agent cannot exhaustively list every duty or function the agent may perform to reasonably find life insurance prospects, the agent will have implied authority to do anything incidental and necessary to achieve its main objective.
As a result, the insurance agent will have the implied authority to use the insurance company’s car, use the logo, wear the company’s uniform or act in ways allowing the agent to find and secure life insurance contracts.
Express agency legal consequence
When you have an express agency where a principal has expressly authorized another person or entity to act on its behalf, there are important legal consequences that you should be aware of.
When a company has express corporate authority or an individual or business was given agency by express agreement.
The agent’s actions, statements, conduct and legal obligations will bind the principal.
In essence, the agent will be acting on behalf of the principal.
In business, an express agency relationship can exist in many scenarios.
For example:
Company ABC hires a Marketing Director (Mary) to handle marketing operations.
As an employee, Mary has the express authority to handle all marketing operations for the company.
In this context, she can present herself as the Marketing Director, use the company logo, write to third parties using the company letterhead and use the company email.
Express agency can also result from an actual agency agreement signed between different companies.
When an agency agreement is signed, the authority of a corporation is expressed in the contract and governed by its terms and conditions.
Typically, a company hiring another company as its agent will include extensive terms and conditions to regulate the agent’s legal authority, define the agent’s duties, and allocate responsibility for the agent’s actions should the agent exceed its mandate.
Implied authority
What is the difference between express authority vs implied authority?
An expressed authority should be contrasted with an implied authority.
When you have an “express” authorization to represent another, you are clearly instructed by the principal (in writing or verbally) to act as an agent.
On the other hand, implied authority (also referred to as usual authority) is the authority to handle incidental matters related to the performance of the agent’s duties.
The agent’s authority is implied as such ancillary and incidental duties are required to allow the principal to perform its responsibilities towards the principal effectively.
In contract law, individuals or entities with implied authority to reasonably perform their acts or duties can legally bind their principal.
Apparent authority
An apparent authority (or apparent agency) refers to a situation when a person appears to have the authority to act on behalf of another.
The notion of apparent authority is used in agency law to ensure that innocent third parties are not led to act to their detriment or suffer a loss as a result of dealing with someone who reasonably appeared to have the authority to act on behalf of another person or company.
In day to day business, we rely on the representations, statements, declarations and actions of individuals claiming to represent a company.
We deal with those individuals assuming that we are dealing with their company (the principal) and not with them personally.
The agent’s conduct combined with the context leading a third party to believe that the principal has authorized this person to act can result in the agent having the “appearance” of authority (even if it was not the case in reality).
Express authority takeaways
So how do you define express authority?
In summary, express authority is when someone (agent) has been given express legal authority to represent and act on behalf of another (principal).
The principal can grant express authorizations to an agent either through clear verbal instructions or in a contract or written document.
With the expressed agency, the agent’s actions will legally bind the principal.
In essence, the principal will need to take ownership and accountability for the actions or omissions of its agent.
