Legal Definitions - actual authority

Actual authority is the power given to an agent to act on behalf of a principal. This power can be given either expressly or impliedly.

Express actual authority is when a principal directly tells the agent that they have the authority to take certain action. For example, if a company hires a salesperson and tells them they have the authority to negotiate and close deals with customers, then the salesperson has express actual authority to do so.

Implied actual authority is the authority that is based on the agent’s reasonable understanding of the principal’s instructions. For example, if a company hires a manager to run a store, the manager has implied actual authority to hire and fire employees, even if the company did not explicitly tell them they have that power.

Another example of implied actual authority is when a doctor prescribes medication to a patient. The patient may not have explicitly given the doctor the authority to prescribe medication, but it is implied that the doctor has the authority to do so based on their role as a medical professional.

Overall, actual authority is important in defining the relationship between a principal and an agent, and ensuring that the agent has the necessary power to act on behalf of the principal.