Question

What is implied authority defined as?

1) Authority given in writing to an agent in the agency agreement
2) Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties
3) Authority given to handle claims and process payments
4) Authority given to an agent to act outside the scope of the agency agreement

Answer 1

Implied authority is authority that is not specifically given to an agent in the agency contract but can be reasonably assumed based on their role and the nature of the agency relationship.

Step-by-step explanation:

Implied authority is defined as authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties. It is not given in writing but is understood based on the nature of the agency relationship and the agent's role. For example, if an employee is hired as a salesperson, it can be reasonably assumed that they have the implied authority to negotiate and close sales on behalf of the company, even if it is not explicitly stated in their contract.