Implied Authority

DEFINITION of 'Implied Authority'

An agent with the jurisdiction to perform acts which are reasonably necessary to accomplish the purpose of an organization. Under contract law, implied authority figures have the ability to make a legally binding contract on behalf of another person or company.

BREAKING DOWN 'Implied Authority'

An agent of an insurance company can be given the authority to solicit applications for life insurance on behalf of the insurer. When the insurer gives the agent that express authority, it also gives the agent the implied authority to telephone prospects on its behalf to arrange sales appointments.