What type of authority does Stacy have according to her contract with Best Rates Insurance Company?

What type of authority does Stacy have according to her contract with Best Rates Insurance Company?

• A. Implied Authority
• B. Express Authority
• C. Apparent Authority
• D. Limited Authority

Answer: (B)

Stacy has express authority according to her contract with Best Rates Insurance Company because express authority is explicitly granted to her through the terms outlined in the contract. This type of authority arises when a principal, in this case, the insurance company, clearly defines what actions an agent, such as Stacy, is authorized to perform on their behalf. The contract typically includes specific duties, powers, and responsibilities that Stacy is allowed to exercise, which provides clear directives for her role within the company. Understanding express authority is crucial because it sets clear expectations for both the agent and the principal, helping to prevent misunderstandings or disputes regarding the scope of the agent's powers. Express authority is confirmed by the written agreement, which serves as a formal acknowledgment of the responsibilities and limits of authority that Stacy possesses while representing Best Rates Insurance Company.

Stacy has express authority according to her contract with Best Rates Insurance Company because express authority is explicitly granted to her through the terms outlined in the contract. This type of authority arises when a principal, in this case, the insurance company, clearly defines what actions an agent, such as Stacy, is authorized to perform on their behalf. The contract typically includes specific duties, powers, and responsibilities that Stacy is allowed to exercise, which provides clear directives for her role within the company.

Understanding express authority is crucial because it sets clear expectations for both the agent and the principal, helping to prevent misunderstandings or disputes regarding the scope of the agent's powers. Express authority is confirmed by the written agreement, which serves as a formal acknowledgment of the responsibilities and limits of authority that Stacy possesses while representing Best Rates Insurance Company.