Legal Definitions - inherent authority

Inherent authority refers to the power an agent possesses to take actions that are reasonably necessary to carry out the tasks they have been explicitly authorized to perform by their principal, even if those specific actions were not directly stated or implicitly understood in the initial grant of authority. This type of authority arises from the practical necessities of the agency relationship, allowing an agent to effectively fulfill their assigned duties when unforeseen minor steps are required to complete the main task. It ensures that an agent can complete the job they were hired for, even if specific instructions for every possible contingency were not provided.

• Example 1: The Restaurant Manager

  A restaurant owner grants their manager actual authority to run the restaurant's daily operations, including ordering supplies, managing staff, and ensuring customer satisfaction. One busy evening, the restaurant's main refrigeration unit unexpectedly breaks down, threatening to spoil a large amount of food and force the restaurant to close. The owner is out of the country and unreachable.

  The manager has inherent authority to immediately call an emergency repair service and approve a reasonable repair cost. While the owner did not explicitly instruct the manager on how to handle a refrigeration breakdown, taking this action is absolutely necessary for the manager to fulfill their actual authority of running daily operations and preventing significant financial loss.

• Example 2: The Construction Site Supervisor

  A construction company owner gives their site supervisor actual authority to oversee a new building project, manage subcontractors, and ensure the project stays on schedule and within budget. During excavation, the crew discovers an unexpected underground utility line that was not on any blueprints. Moving it requires a specialized contractor and a minor, unbudgeted expense to avoid significant delays to the entire project. The owner is in a critical, all-day meeting and cannot be disturbed.

  The site supervisor has inherent authority to engage the specialized contractor and approve the necessary expense to relocate the utility line. This specific action was not explicitly granted or implied, but it is a necessary step for the supervisor to fulfill their actual authority of keeping the project on schedule and managing subcontractors effectively.