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Express actual authority carries with it the implied authority to do what is ordinarily incidental to it

A worked RES examination question on agency creation authority, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 1Lesson 8Agency creation authorityFree — no sign-up

The question

A principal instructs his agent in writing to "market the flat and find me a buyer", saying nothing further. The agent places advertisements, arranges viewings, and answers questions about the tenure and the maintenance charges. Separately, the principal introduces the agent to a prospective buyer at a coffee shop as "my agent, he handles everything for me".

Consider the following statements.

  1. (i) Placing advertisements and arranging viewings fall within what the instruction implies.
  2. (ii) The agent has no authority to do anything not expressly listed in the instruction.
  3. (iii) The introduction at the coffee shop clothes the agent with authority in the buyer's eyes.
  4. (iv) Acts within the agent's authority bind the principal as though he had done them himself.
  1. A. (i), (ii) and (iv) only
  2. B. (ii), (iii) and (iv) only
  3. C. (i), (iii) and (iv) only
  4. D. (i), (ii), (iii) and (iv)

The answer, and why

Answer: C

The rule. Express actual authority carries with it the implied authority to do what is ordinarily incidental to it. Apparent authority arises from what the principal represents to a third party. Acts within either bind the principal.

Why C is correct. (i), (iii) and (iv) are correct. (ii) is false — an instruction need not enumerate every act; implied actual authority fills the gap.

The other options.

  • A and D carry the false (ii).
  • B drops the correct (i).

Exam note. "Nothing further was said" is not the same as "nothing further is authorised".

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