Authority (express or implied) conferred by the principal on an agent under an agency contract.

• A. Express authority
• B. Actual authority
• C. Implied authority
• D. Apparent authority

Answer: (B)

Actual authority is the authority given by the principal to the agent, and it includes both express and implied forms. Express authority is explicit permission—clear instructions in the agency contract or direct statements to the agent. Implied authority arises from the agent’s position, duties, or past conduct, allowing actions that are reasonably necessary to carry out the duties, even if not explicitly stated. Together, express and implied authority describe the authority the principal has actually granted to the agent to act on the principal’s behalf under the agency agreement. This is different from apparent authority, which depends on what a third party reasonably believes based on the principal’s representations, not on what the principal actually conferred.