What type of authority allows an agent to act on behalf of the principal without explicit instructions?

Implied authority refers to the type of authority that enables an agent to take actions on behalf of a principal without the need for explicit instructions or agreement. This authority is inferred from the position of the agent or the circumstances of the situation. For instance, if a manager is tasked with running daily operations, it is generally understood that they have the authority to make decisions that are customary and necessary to fulfill that role, even if specific actions were not outlined in advance.

This concept recognizes that, in many cases, principals cannot specify every action an agent may need to take. Consequently, implied authority is critical in allowing agents to perform their duties effectively. In contrast, express authority requires clear and direct instructions from the principal, prohibiting actions outside those specific guidelines.

Ostensible authority arises when a principal manifests an impression that an agent has the authority to act on their behalf, thereby binding the principal to the agent's actions. This differs from implied authority, as it relies on perceptions rather than natural inferences from an agent's role. Legal authority pertains to powers granted by law, but it does not specifically address the relationship between agents and principals in the context of absence of explicit instructions.