What characterizes Express Agency Authority?

• A. It is given verbally without documentation
• B. It is implied through the agent's actions
• C. It is granted through an explicit contract
• D. It is provided by external regulation

Answer: (C)

Express Agency Authority is characterized by it being granted through an explicit contract. This type of authority is established when a principal provides a clear and specific agreement to an agent, outlining the extent of the agent's powers and responsibilities. This contract can take the form of a written agreement or may even be verbal, as long as the terms are clearly defined and understood by both parties.

The specificity of Express Agency Authority is crucial because it delineates what the agent is authorized to do on behalf of the principal, ensuring that both the agent and the principal have a clear understanding of their roles. This reduces the risk of misunderstandings or disputes regarding the agent's actions and decisions.

Unlike implied authority, which originates from the actions of the agent that suggest authority, or authority granted through external regulations, Express Agency Authority relies specifically on a direct and formal agreement. This characteristic makes it distinct and essential in establishing a professional relationship between the principal and the agent.