Legal Definitions - real authority

Real authority, also known as actual authority, refers to the power that a person (known as an "agent") genuinely possesses to act on behalf of another person or entity (the "principal"). This authority is directly granted by the principal and can be either:

• Express authority: Explicitly stated, either verbally or in writing, detailing exactly what the agent is permitted to do.
• Implied authority: Not explicitly stated, but reasonably inferred from the circumstances, the agent's position, the custom of the business, or what is necessary to carry out the express authority granted.

In essence, real authority is the power an agent truly has, as opposed to merely appearing to have.

Examples:

• A small business owner hires a new marketing director and provides them with a detailed job description that explicitly states, "The Marketing Director is authorized to approve advertising expenditures up to $10,000 per campaign without further consultation."

  Explanation: The marketing director has real authority (specifically, express authority) to approve campaigns within that budget because the business owner, as the principal, directly and explicitly granted this power in writing.

• A general contractor is hired to build a new custom home. While the contract doesn't explicitly list every single tool or material the contractor can purchase, it is understood that they have the power to buy standard construction materials like lumber, nails, and concrete, and to rent necessary equipment like excavators or scaffolding.

  Explanation: The general contractor possesses real authority (specifically, implied authority) to acquire these items. This power is reasonably inferred because purchasing such materials and renting equipment is customary and necessary to fulfill their primary duty of building the home.

• A university department head is given the responsibility to manage their department's budget. Although their employment contract doesn't explicitly state they can approve travel requests for faculty to attend academic conferences, it is a long-standing practice within the university that department heads handle such approvals as part of their budgetary oversight.

  Explanation: The department head has real authority (implied authority) to approve faculty travel. This power is implied by their role in managing the department's budget and by the established customs and practices within the university setting.