When a principal gives an agent authority to act on their behalf by mutual consent, either in writing or orally, this is known as what?

When a principal gives an agent authority to act on their behalf by mutual consent, either in writing or orally, this is known as what?

• A. Implied Authority
• B. Express Authority
• C. Agency by Estoppel
• D. Agency by Ratification

Answer: (B)

Express authority is authority that the principal explicitly gives to the agent through mutual agreement, either in writing or orally. This direct grant defines exactly what the agent is allowed to do on behalf of the principal, and the agent acts within that defined scope. It’s different from implied authority, which comes from the nature of the relationship or the duties involved rather than a specific statement. For example, a property owner telling a broker to list the home and negotiate offers creates express authority, whether in a written listing contract or an oral instruction. The principal is bound by the agent’s actions that stay within that granted scope, and authorities beyond this scope would not be binding unless later ratified by the principal.

Express authority is authority that the principal explicitly gives to the agent through mutual agreement, either in writing or orally. This direct grant defines exactly what the agent is allowed to do on behalf of the principal, and the agent acts within that defined scope. It’s different from implied authority, which comes from the nature of the relationship or the duties involved rather than a specific statement. For example, a property owner telling a broker to list the home and negotiate offers creates express authority, whether in a written listing contract or an oral instruction. The principal is bound by the agent’s actions that stay within that granted scope, and authorities beyond this scope would not be binding unless later ratified by the principal.