Implied Authority of Contract is a legal term. In
contract law
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to t ...
, it is the implied ability of an individual to make a legally binding contract on behalf of an organization, by way of uniform or interaction with the public on behalf of that organization. When a person is wearing a uniform or nametag bearing the
logo
A logo (abbreviation of logotype; ) is a graphic mark, emblem, or symbol used to aid and promote public identification and recognition. It may be of an abstract or figurative design or include the text of the name it represents as in a wo ...
or trademark of a business or organization; or if that person is functioning in an obviously authorized capacity on behalf of a business or organization, that person carries an Implied Authority of Contract. An implied authority is authority that is not expressly granted by the contract, but that is assumed by the agent in order to have the ability to transact insurance business on behalf of the principal, regardless of what the contract specifically states. As stated above, implied authority is incidental to express authority, since you cannot spell out every single detail in the written contract about what the agent might be able to do. For example, if you are at a restaurant and your waitress tells you that she can give you a free beverage if you pay for an entree, she has made a contract with you on behalf of the business by which she is employed. It is ''implied'' that she is given the ''authority'' to do so by the fact that she is the sole employee of the business who has been designated to complete a transaction with you. (Whether or not other employees ultimately get involved in your transaction is irrelevant, because it is expected that ideally she is the only person required to complete your business.)
Continuing the scenario, suppose that a manager were to come to your table and inform you that your waitress has made a mistake; that the "free beverage w/ paid entree" offer has expired and that you will be expected to pay for your beverage. At this point the business is in direct violation of a legally enforceable contract made between you, the client, and their employee.
They may penalize the employee for the mistake, but Implied Authority of Contract places them under a legal obligation to honor the terms of the agreement.
The same principle applies to more complex or extreme legal circumstances.
A design professional's implied authority gives the designer the means to act in ways that are incidental to the exercise of actual authority. It is authority that isn't written down, but needs to be understood to make the construction process a success.
Besides Implied Authority, look into
Apparent Authority In the United States, the United Kingdom, Australia, Canada and South Africa, apparent authority (also called "ostensible authority") relates to the doctrines of the law of agency. It is relevant particularly in corporate law and constitutional la ...
and
Express Authority as well. In relation to
companies
A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared go ...
, apparent authority is usually referred to as "
ostensible authority".
-These three are known as the Agency Relationship.
Contract law
Source: https://corporatefinanceinstitute.com/resources/knowledge/deals/implied-authority/
Source
https://www.law.cornell.edu/wex/apparent_authority#:~:text=Apparent%20authority%20is%20the%20power,such%20power%20to%20the%20agent.{{Law-term-stub