Understanding the Difference Between Express and Implied Authority

What is Implied Authority?

Implied authority refers to an agent with the jurisdiction to perform acts which are reasonably necessary to accomplish the purpose of an organization. It is an essential concept to understand, especially when discussing the difference between express and implied authority.

Express Authority

Express authority is the authority explicitly granted to an agent through words, either written or spoken. It is a clear and direct authorization given to an agent by a principal. For example, a company may grant express authority to its sales representatives to negotiate and enter into contracts on its behalf.

Implied Authority

On the other hand, implied authority is not explicitly stated but is reasonably inferred from the circumstances and the nature of the agency relationship. It is the authority necessary to carry out the express authority given to the agent. Implied authority allows the agent to take actions that are reasonably necessary to fulfill their responsibilities.

Key Differences

The main difference between express and implied authority lies in their nature. Express authority is explicitly stated, while implied authority is derived from the circumstances and the agent's position. Express authority is clear and specific, leaving no room for interpretation. Implied authority, on the other hand, may require an analysis of the agent's actions and the scope of their responsibilities.

Another difference is that express authority can be limited, meaning the agent is only authorized to perform specific acts. Implied authority, on the other hand, can be broader as it encompasses actions reasonably necessary to carry out the agent's duties.

Example of Implied Authority

An example of implied authority can be seen in the relationship between a CEO and their executive assistant. The CEO grants express authority to the executive assistant to schedule meetings, manage their calendar, and handle administrative tasks. However, the executive assistant also has implied authority to make necessary purchases for office supplies or arrange travel arrangements for the CEO, as these actions are reasonably necessary for them to fulfill their responsibilities.

Special Considerations

When dealing with implied authority, there are a few special considerations to keep in mind. Firstly, it is important to establish clear boundaries and define the scope of the agent's authority. This can help prevent any misunderstandings or actions that fall outside the agent's responsibilities.

Additionally, the principal is responsible for the actions of their agent, whether express or implied. It is crucial for the principal to monitor and ensure that the agent's actions align with their intentions and the best interests of the organization.

Educational and Formal Perspective

From an educational and formal perspective, understanding the difference between express and implied authority is crucial for individuals studying business, law, or management. It provides insights into the complexities of agency relationships and the importance of clearly defining authority.

Millennials and Authority

For millennials entering the workforce, understanding the concept of authority, both express and implied, is essential. As they navigate their careers and assume various roles, they will encounter situations where they need to exercise authority or work under the authority of others. Understanding the different types of authority can help millennials effectively fulfill their responsibilities and contribute to the success of their organizations.