Actual authority is defined as which of the following?

Actual authority refers to the power that an agent has been granted by the principal, which can be expressed in a direct manner or implied through the circumstances of the agent's role. This authority encompasses both express powers, which are clearly articulated and documented, and implied powers, which are not explicitly stated but are necessary to fulfill the agent's duties effectively.

For instance, if a principal hires an agent to negotiate contracts, the express authority would be the specific terms laid out in the agreement, while implied authority might include the ability to engage in discussions with third parties necessary to negotiate those contracts. Actual authority, therefore, ensures that the agent can act on behalf of the principal in a manner that is consistent with the principal's intentions, whether those intentions are clearly expressed or understood from the context of the agent's role. This distinction is crucial for both the principal's ability to manage their representation and for third parties' ability to engage with agents confidently.