What does implied authority refer to in a contractual context?

Implied authority refers to the authority that allows an agent to take actions that are necessary to effectively carry out the duties specified in their express authority. In a contractual context, express authority is the authority granted to an agent clearly through the terms of a contract or agreement. However, there are often actions that an agent must undertake that are not specifically enumerated in the contract but are necessary for the execution of the agent’s roles and responsibilities.

For instance, if an agent is authorized to negotiate a lease on behalf of a principal, they may have the implied authority to perform actions like communicating with the landlord, making necessary arrangements, and signing documents that facilitate the lease agreement. These actions are not explicitly detailed in the contract but are essential to achieving the goals outlined in the express authority.

This understanding of implied authority is crucial because it ensures that agents can act flexibly within the scope of their responsibilities, even when some tasks are not directly stated in the agreement. It reflects a practical approach to agency relationships, allowing for the completion of tasks that support the principal's objectives.