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Implied Authority

Definition

Implied Authority of Contract is a legal term. In contract law, it is the implied ability of an individual to make a legally binding contract on behalf of an organization, by way of uniform or interaction with the public on behalf of that organization. When a person is wearing a uniform or nametag bearing the logo or trademark of a business or organization; or if that person is functioning in an obviously authorized capacity on behalf of a business or organization, that person carries an Implied Authority of Contract. Implied Authority is authority that is not express or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal. Implied authority is incidental to express authority since not every single detail of an agent's authority can be spelled out in the written contract.

What is 'Implied Authority'

An agent with the jurisdiction to perform acts which are reasonably necessary to accomplish the purpose of an organization. Under contract law, implied authority figures have the ability to make a legally binding contract on behalf of another person or company.

Explaining 'Implied Authority'

An agent of an insurance company can be given the authority to solicit applications for life insurance on behalf of the insurer. When the insurer gives the agent that express authority, it also gives the agent the implied authority to telephone prospects on its behalf to arrange sales appointments.


Further Reading


Port administrative structure change worldwide: Its implication for restructuring port authorities in Taiwan
www.tandfonline.com [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …

Economic and financial crime commission (efcc) and political corruption: Implication for the consolidation of democracy in NigeriaEconomic and financial crime commission (efcc) and political corruption: Implication for the consolidation of democracy in Nigeria
www.tandfonline.com [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …

China's free trade zones: Regulatory innovation, legal assessment and economic implicationChina's free trade zones: Regulatory innovation, legal assessment and economic implication
www.tandfonline.com [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …

Financial deepening dynamics and implication for financial policy coordination in a monetary union: The case of WAEMUFinancial deepening dynamics and implication for financial policy coordination in a monetary union: The case of WAEMU
papers.ssrn.com [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …

Fair value accounting, financial economics and the transformation of reliabilityFair value accounting, financial economics and the transformation of reliability
www.tandfonline.com [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …

Shanghai as an International Financial Center-Aspiration, Reality and ImplicationShanghai as an International Financial Center-Aspiration, Reality and Implication
digitalcommons.iwu.edu [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …

An aproach of local financial autonomy and implication over sustainable development in the knowledge societyAn aproach of local financial autonomy and implication over sustainable development in the knowledge society
www.ceeol.com [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …

Federal use of implied guarantees: Some preliminary lessons from the current financial distressFederal use of implied guarantees: Some preliminary lessons from the current financial distress
onlinelibrary.wiley.com [PDF]
… These examples imply that the regulatory function has been separated from port functions … duties assigned by the government, eg, the Port of Rotterdam Authority, Australian port … Port Administrative Structure Change Worldwide: Its Implication for Restructuring Port Authorities in …



Q&A About Implied Authority


What does implied authority allow agents to do?

Agents with implied authority have the ability to make legally binding contracts on behalf of another person or company.

What kind of contracts are made by insurance salesmen with their clients that may not be considered legally binding for insurance companies themselves but only for the salesmen who made them?

Contracts involving life insurance policies are often made by salesmen without express authorization from their employers; however, these contracts are still valid and enforceable against both parties involved in making them because they were done under circumstances where it was reasonable for both parties to assume that there was such authorization given.

What is implied authority?

Implied authority is the ability of an agent to perform acts that are reasonably necessary in order to accomplish the purpose of an organization.

When would it be reasonable for a client to assume that he or she had been given permission by his or her insurer's salesman to enter into a contract with him/herself (the salesman)?

It would be reasonable for a client to assume this when he/she sees no evidence whatsoever from his/her insurer's salesman indicating otherwise; furthermore, it would also be reasonable for him/her to believe this if he/she hears nothing from his/her insurer's representative discouraging him

Who can give agents implied authority?

The person or company who gives an agent express authority can also give them implied authority.

Can insurance companies give their agents implied authority?

Yes, they can.

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