What term refers to the authority that the principal explicitly grants to the agent under an agency contract?

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Study for the Chartered Property Casualty Underwriter 530 Exam with flashcards and multiple choice questions. Each question has hints and explanations to enhance your understanding and prepare you thoroughly.

Multiple Choice

What term refers to the authority that the principal explicitly grants to the agent under an agency contract?

Explanation:
Express authority is the explicit grant by the principal to the agent, spelled out in the agency contract, about what the agent is allowed to do on the principal’s behalf. This authority can be in writing or spoken, and it defines the specific actions, limits, and duration the agent may exercise. It’s distinguished from implied authority, which comes from the duties of the role and necessary actions to carry out the express powers, and from apparent authority, which arises when a third party reasonably believes the agent has authority based on the principal’s representations.

Express authority is the explicit grant by the principal to the agent, spelled out in the agency contract, about what the agent is allowed to do on the principal’s behalf. This authority can be in writing or spoken, and it defines the specific actions, limits, and duration the agent may exercise. It’s distinguished from implied authority, which comes from the duties of the role and necessary actions to carry out the express powers, and from apparent authority, which arises when a third party reasonably believes the agent has authority based on the principal’s representations.

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