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Agency law

Actual implied authority

Even if authority has not been expressly given it can be implied in a number of
circumstances.

In determining if an agent has implied authority, a number of factors must be taken
into consideration:
 Behaviour which is customary or usual in the circumstances

 Past conduct/authority.

For example, a partner will have implied authority to undertake a number of things
such as enter into contracts, attend meetings on behalf of the business, execute
contracts and employ staff.

Illustration 4 – Authority of agents

WATTEAU v FENWICK 1893

Facts:

The principal owned a hotel and employed the previous owner as a manager to
run it. Against his employer’s express instructions the manager entered into a
contract to buy some cigars on credit.

Held:

Such a contract was usual for a manager of a hotel and as such when the
contract was entered into it was within the manager’s implied authority. The third
party was unaware of any restrictions on the manager’s actual authority and as
such he could enforce the contract against the owner.

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