DT#9: Authority

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Agent authority
An agent is a person who acts on behalf of another having been handed and assumed responsibility to do so. Business organizations extensively rely on agents to conduct their business on their behalf keenly considering the way in which the agent carries his duties on behalf of the client and towards the client.
The law acknowledges various types of authority; ratified authority, actual authority, and apparent authority. Actual authority is of two kinds implied and express authority. Implied authority means that an agent is allowed to perform duties which help greatly in the effective performance of his duties. The way this responsibility is applied depends on the terms of business or trade taking place. This type of authority is also known as usual authority. In Express authority, the type of authority used is the one that principal is given to the client directly. It is given orally by word of mouth or in writing.
Another type of authority is apparent (not actual) authority. It comes about when the principal is able to convince the third participant that he is acting on his behalf as an agent but the agent is only there for appearance only to represent the principal. However, if the third party enters into an agreement with the agent despite the condition, that agreement is legally binding on the principal and will give rise to a condition which prevents the principal from refuting that that contract is binding.
It is important to identify an agent’s authority so as to ensure that the agent is acting on only necessary authority and not overstepping his authority.

Generally, the third party assumes that the agent is acting in good faith thus eliminates the cost of checking the agent’s authority.