Agent's authority

In this lesson

1. 0:00 Introduction to agent authority
2. 0:23 Three types of agent authority explained
3. 1:02 Actual authority: express and implied
4. 2:01 Implied authority and managing directors
5. 2:47 Apparent authority and third-party reliance
6. 4:33 Freeman and Lockyer case study
7. 6:01 Apparent authority in practice

About this lesson

This is essential for the Corporate and Business Law paper, as agency law questions often test your ability to distinguish between these categories and apply them to real-world scenarios. The lesson breaks down express authority (explicitly agreed powers, like a budget limit) and implied authority (powers that come from the agent's role, such as a managing director's automatic power to bind a company). You'll see how exceeding express authority doesn't automatically protect you—the key is whether a third party would reasonably believe the agent had that power, which brings us to apparent authority. Apparent authority is where an agent appears to have authority based on how they've been held out by the principal, even if they haven't actually been given it. The landmark Freeman and Lockyer v Buckhurst Park Properties case shows how this works in practice: a director who presented himself as managing director (through business cards, email signatures, and the company's inaction) was able to bind the company into an architectural contract, even though he'd never been formally appointed. The court ruled that suppliers aren't required to verify an agent's authority—they can reasonably rely on how the agent presents themselves. Understanding these three forms of authority helps you answer exam questions about liability, contract formation, and when principals can be held responsible for their agents' actions.

Duration: 8m