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Implied Authority

Implied authority comes into play in any situation that involves a principal giving the impression to the public or any other involved third party that a certain agent has the full authority to act on their behalf. An example of implied authority in the real estate world would be a real estate agent handling a transaction on behalf of another real estate agent or brokerage. In this case, the real estate agent is giving the impression that they have the same power of agency as the original real estate agent or brokerage.

Essentially, implied authority gives the agent power to represent the principal without direct authorization! It is also important to note that this type of authority is limited to carrying out activities that are reasonably related to the principal’s business. For example, an agent hired to manage a property on behalf of an owner would have implied authority to take actions such as signing leases, collecting rent and making repairs to the property.

Implied authority is a very useful type of authority in the business world, allowing agents to promote their principals business interests in a more effective manner, while also allowing the principal to maintain some control over the transaction in question. It also allows for a more streamlined transition as an agent has already been given the power to act on behalf of the principal.

As such, implied authority is a critical concept in the world of business, as it allows businesses and their agents to interact without the need for continual permissions and authorization. It is important to note however that the extent of such authority can be legally challenged in certain situations and the agent may not have the same authority as the principal in all circumstances. Despite this potential limitation, implied authority is a useful tool for both businesses and their agents and can assist in providing flexibility and expediting transactions.

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