Which term describes authority that is not explicitly granted in the agency contract but that an agent can reasonably assume to carry out duties?

• A. Implied authority
• B. Express authority
• C. Apparent authority
• D. Reciprocal authority

Answer: (A)

Implied authority is the authority an agent has to act that isn’t written in the contract but is reasonably necessary to do the job. When a contract gives explicit (express) authority for certain actions, the agent can take other reasonable steps that are typically required to carry out those duties. This lets the agent perform tasks that are a natural extension of the stated responsibilities, such as gathering information, collecting premiums, or processing forms, as long as those actions are customary and within the scope of the relationship.

Express authority is the explicit scope written in the contract. Apparent authority is about what a third party believes the agent can do based on the principal’s representations. Reciprocal authority isn’t a standard term used for this concept.