How does express authority differ from implied authority in an agency?

Express authority and implied authority represent two distinct ways in which an agent can be authorized to act on behalf of a principal in the context of agency law.

Express authority is explicitly granted by the principal to the agent, which means that the authority is clearly articulated, either through verbal communication or in writing. This type of authority leaves little room for misunderstanding since it delineates the specific tasks, responsibilities, and actions that the agent is permitted to undertake on behalf of the principal.

Implied authority, on the other hand, arises not from explicit statements but from the circumstances surrounding the agency relationship. It encompasses actions that are reasonably necessary for the agent to perform their responsibilities, even if those actions are not specifically mentioned or detailed by the principal. This can be inferred from the nature of the agent's role or from customary practices within the industry.

Choosing the option that states express authority is clearly stated while implied authority is inferred captures the essential distinction between the two. Express authority provides a clear directive, while implied authority allows for some flexibility and interpretation based on the context of the agency agreement. This understanding of the relationship between express and implied authority is crucial in determining the scope of an agent's power to act.