Also known as: actual authorities · express authority · implied authority
Written by attorneys · grounded in primary & secondary sources — see below
Power conferred by a principal on an agent through direct manifestations of consent, whether by words or conduct. This power includes both express grants and those implied from the circumstances of the relationship.
Ariana Azizi instructed her lawyer in writing to settle her contract dispute for any amount above $75,000. The lawyer negotiated and accepted an offer of $80,000 on her behalf. Azizi later refused to sign the agreement, claiming the lawyer had gone too far. The lawyer possessed actual authority from the express written instruction.
Apex Dynamics passed a board resolution authorizing its CEO to negotiate and execute a supply contract with Astra Aerospace. The CEO signed the agreement after obtaining board approval. When a shareholder challenged the deal, the court upheld it because the CEO had acted with actual authority conferred directly by the board.
Artemis Logistics bylaws granted its president authority to manage day-to-day operations, including hiring staff. The president hired a new operations manager without further board action. When the board later objected, the court found the president possessed actual authority implied from the bylaw grant.
Select any source to read its text and confirm it supports the definition.
Avalon Pharmaceuticals directors passed a resolution empowering the CFO to borrow up to $5 million for working capital. The CFO obtained a $4 million loan from a bank. When directors later disputed the loan, the court held the CFO had acted within the actual authority granted by the resolution.
Alan Ackerman and Alice Atkins formed a partnership and agreed in writing that Ackerman could purchase inventory up to $50,000 without further approval. Ackerman bought $45,000 in goods. Atkins later claimed the purchase exceeded authority. The court enforced the transaction because Ackerman had received actual authority from the partnership agreement.
Adam Anderson served as treasurer of a nonprofit under bylaws that authorized the treasurer to sign checks for routine expenses. Anderson paid several vendor invoices. When the board challenged the payments, the court determined Anderson had acted with actual authority implied from the treasurer's position and bylaw language.
Actual authority arises when a principal manifests consent to an agent, either expressly through words or impliedly through conduct and circumstances. The agent must reasonably believe the principal has granted the power.
Supporting sources
No. Actual authority may be created orally or through conduct. A writing is common in formal settings but is not required for the power to exist.
Supporting sources
The principal is not bound unless the agent also possessed apparent authority or the principal later ratifies the act. The agent may be liable to the principal for resulting losses.
Supporting sources
Actual authority terminates when the principal revokes consent, the agent renounces the role, or the underlying purpose is accomplished. Revocation is effective upon communication to the agent.
Supporting sources
…resident alien. The history of the Immigration and Nationality Act makes clear that § 244(c)(2) did not alter the division of actual authority between Congress and the Executive. At all times, whether through private bills, or through affirmative concurrent resolutions, or through the present one-House veto, a permanent change in…