How is "implied authority" defined in the context of agency contracts?

Implied authority in the context of agency contracts refers to the authority that is not explicitly stated but is reasonably assumed to be granted to the agent based on the relationship and the tasks typically associated with the agent's role. This type of authority allows an agent to act in ways that are necessary to fulfill the responsibilities outlined in the agency agreement, even if those specific actions are not directly mentioned in the contract.

For example, if an agent is given the authority to purchase supplies for a business, it is implied that they can also negotiate pricing or terms with suppliers, even if that specific authority was not listed in the contract. This understanding helps ensure that the agency relationship functions effectively, allowing the agent to operate within the scope of their duties without needing constant explicit permission for every action.

The other options do not define implied authority correctly. Explicit authority contrasts with implied authority by being clearly stated in a contract. Authority from a regulatory body refers to permissions granted through legal or regulatory means, and common law authority pertains to rights established by judicial decisions rather than the context of agency contracts. Each of these reflects a different source or type of authority that does not align with the concept of implied authority.