Restatement (Third) of Agency · Section § 8-09
An overview of the principles pertaining to the scope of authority of agents as outlined in Restatement § 8-09.
Source: Restatement Restatement (Third) of Agency § § 8-09
An agent acts with actual authority when the principal expressly grants authority to the agent or expressly or implicitly agrees that the agent is to act on the principal's behalf.
Section 8-09 discusses how an agent's authority can be established through express or implied consent from the principal. An agent's actions are legally binding on the principal when the agent acts within the scope of that authority.
This section emphasizes the need for clarity in the relationship between the agent and principal regarding authority.
It distinguishes between express and implied authority, vital for understanding the scope of the agent's powers.
Illustration 1
An agent is assigned in writing to negotiate contracts on behalf of a company, thereby having actual authority.
Illustration 2
If a principal allows an agent to make certain decisions, the agent may imply authority to act in those areas as understood by both parties.
This case illustrated the limits of implied authority when a principal did not adequately inform the agent of the actual scope of their powers.
Understanding Section 8-09 is crucial for both agents and principals to ensure that agency relationships are clear and enforceable. It helps mitigate risks related to unauthorized acts by agents and protects the interests of both parties involved in agency transactions.