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Difficulty: EasyAgent Authority and Agency Law

An insurance company provides its newly appointed producer with a formal, written contract. This document explicitly states that the producer is authorized to solicit life insurance applications and collect initial premiums on behalf of the insurer. Under the principles of agency law, what specific type of authority is granted to the producer through this written document?

  1. Express authorityAnswer
  2. B
    Implied authority
  3. C
    Apparent authority
  4. D
    Authority by estoppel

Answer

Express authority
The correct answer is express authority because this type of authority is explicitly stated in the written contract between the principal (the insurer) and the agent (the producer). Any power directly written in the agency agreement falls under this category.

Step-by-Step Solution

1
Analyze the source of the producer's power described in the scenario.
The power is granted through a formal, written contract provided by the insurer.
Identifying how the authority is communicated determines its legal classification.
2
Match the source of power to the correct principle of agency law.
Authority that is explicitly stated in writing by the principal is defined as express authority.
This differentiates it from implied (unwritten but necessary) or apparent (perceived by the public) authority.

Key Concept

Express Authority
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Topics

Agent Authority and Agency Law

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