Implied Authority

Implied authority is a legal concept that allows an agent to act on behalf of a principal in situations where the principal has not explicitly given the agent permission to do so. This type of authority is based on the principal's actions or statements, which can be interpreted as giving the agent permission to act.

For example, if a principal hires an agent to sell their house, the principal is impliedly giving the agent the authority to sign a sales contract on their behalf. This is because the principal has taken the action of hiring the agent to sell their house, which can be interpreted as giving the agent the authority to sign a sales contract.

Implied authority can also be based on the principal's statements. For example, if a principal tells an agent that they can sign a sales contract on their behalf, the principal is impliedly giving the agent the authority to do so.

It is important to note that implied authority is not the same as actual authority. Actual authority is a legal concept that refers to the authority that a principal has explicitly given to an agent. In contrast, implied authority is a legal concept that refers to the authority that a principal has not explicitly given to an agent, but which can be inferred from the principal's actions or statements.

The distinction between implied authority and actual authority is important because it can affect the liability of the principal and the agent. If an agent acts within the scope of their implied authority, the principal is liable for the agent's actions. However, if an agent acts outside the scope of their implied authority, the principal is not liable for the agent's actions.

For example, if a principal hires an agent to sell their house, the principal is liable for any sales contracts that the agent signs on their behalf. However, if the principal hires an agent to sell their house, but the agent also starts giving away the principal's furniture, the principal is not liable for the agent's actions because the agent is acting outside the scope of their implied authority.

It is important to be aware of the difference between implied authority and actual authority in order to avoid liability for the actions of your agents. If you are unsure whether an agent has the authority to act on your behalf, you should seek legal advice.