Actual authority (English agency law)
Actual authority arises from the principal’s conferral of authority on the agent. It may be express or implied from the agreement, role and circumstances. An agent acting within actual authority can affect the principal’s legal relations with third parties, subject to the facts and applicable law. Actual authority is distinct from apparent authority, which depends on a representation to the third party and reliance.
Worked example
A company expressly authorises its purchasing manager to buy a specified machine. The manager contracts within those instructions, so actual authority is relevant to whether the company is bound.
Common mistake
Assuming the agent’s own assertion creates actual authority, or treating actual authority as identical to apparent authority.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | LW (ENG) | Direct | September 2026–June 2027 |