What describes implied authority?

• A. The authority to perform acts explicitly authorized in the contract.
• B. An agent's authority to do things not specifically authorized in order to carry out express authority.
• C. Authority to take any action regardless of the principal's consent.
• D. Authority that requires direct written approval for every action.

Answer: (B)

Implied authority is the power an agent has to take actions that aren’t specifically spelled out in writing or spoken terms, but are reasonably necessary to carry out the express authority the principal has given. It flows from the agency relationship and the usual practices of the business, plus the agent’s position and duties.

For example, if a seller grants a broker the authority to sell a property, the broker typically has implied authority to show the property, answer common questions from prospective buyers, and negotiate offers within the normal framework, even if those steps aren’t explicitly listed in the contract. These actions are reasonably necessary to fulfill the express instruction to sell.

Keep in mind that implied authority must stay within what’s reasonably needed to achieve the express authority and can’t authorize actions that violate the contract terms or law. Direct written approval for every action isn’t implied; it would fall under explicit authority instead.