Also known as: actual agencies · actual authority
Written by attorneys — see sources below.
A consensual relationship in which one person acts as agent for another because the principal has actually employed the agent and granted authority to act on the principal's behalf. The agent's power derives directly from the principal's manifestation of consent rather than from any appearance created for third parties.
Anthony Arnold retained Austin Abbott as counsel in pending litigation. Arnold expressly told Abbott that any settlement offer above a stated amount required Arnold's personal approval. Abbott nevertheless accepted an offer from the opposing party without obtaining that approval. Because Abbott acted without actual authority, the settlement cannot bind Arnold even though the opposing party relied on Abbott's representations.
Arthur Abrams, a passenger on a Royal Caribbean vessel, suffered injuries after the ship's doctor and nurse provided negligent care. Patricia Franza sued Royal Caribbean under an actual agency theory, alleging the medical staff were employees acting within the scope of authority granted by the cruise line. The court examined whether the line had in fact employed and controlled the staff, which would establish actual agency and impose vicarious liability.
In July 2011, Pasquale Vaglio was a passenger on the Explorer of the Seas, a cruise ship owned and operated by Royal Caribbean Cruises, Ltd. On July 23, after the ship docked in Bermuda, Vaglio fell while boarding a trolley at or near the dock and suffered a severe blow to the head. He was taken in a wheelchair to the ship's infirmary around 10:00 a.m. There, nurse Racquel Y. Garcia, allegedly employed full-time by Royal Caribbean, examined him and observed a lump and an abrasion on his head but did not administer any diagnostic scans. Vaglio was advised he was fine to return to his cabin and might have a concussion, and he returned around 10:45 a.m. with no further care. About ninety minutes later, at 12:15 p.m., Vaglio's condition deteriorated, leading his daughter-in-law to call 911. After delays in obtaining a wheelchair and credit card information, Dr. Rogelio Gonzales, also allegedly an employee of Royal Caribbean, examined Vaglio at about 1:45 p.m., started a Mannitol drip, and ordered transfer to King Edward Memorial Hospital in Bermuda, where Vaglio arrived at approximately 4:22 p.m. Vaglio was airlifted to Winthrop-University Hospital in Mineola, New York, the next day and remained in intensive care until he died one week later. On January 10, 2013, Patricia Franza, Vaglio's daughter and personal representative of his estate, filed a three-count complaint against Royal Caribbean in the United States District Court for the Southern District of Florida under 28 U.S.C. § 1333 and the general maritime laws, alleging negligence by the onboard medical staff under actual and apparent agency theories. The district court dismissed the complaint on May 30, 2013, and Franza appealed to the United States Court of Appeals for the Eleventh Circuit.
View caseActual agency exists only when the principal has in fact employed the agent and granted authority through a consensual manifestation. Apparent agency arises when the principal's conduct creates a reasonable belief in a third party that authority exists, even if no actual authority was granted. The distinction matters because actual agency binds the principal regardless of third-party notice, while apparent agency protects only reasonable reliance by outsiders.
Direct statements from the principal to the agent granting power, or a course of dealing in which the principal consistently permits the agent to act in a particular way, establish actual authority. Internal revocation of that authority ends actual agency even if the third party remains unaware. Courts look to the principal-agent relationship itself rather than outward appearances.
Supporting sources
No. Actual authority granted by a power of attorney terminates upon the principal's death or, for a non-durable instrument, upon the principal's incapacity. The agent's power is rooted in the principal's personal consent, which ends with these events. Third parties may receive separate good-faith protections, but those do not preserve the agent's actual authority.
Supporting sources
…is obvious that implied authority cannot, by its very nature, be inconsistent with express authority because any expression of actual authority must control. William A. Gregory, The Law of Agency And Partnership § 15 (3d ed.2001). For example, as it would apply to this case, the chief executive officer possesses the authority to…