What type of authority is created through verbal or written communication?

The correct answer is Express Actual Authority because it is defined as the authority explicitly granted to an agent by the principal through direct verbal or written communication. This type of authority is clearly articulated, meaning that the principal has intentionally conveyed specific permissions to the agent, allowing them to act on the principal's behalf.

For example, if a business owner provides a written document to an employee stating that they have the authority to negotiate contracts with clients, this establishes a clear and express actual authority. The agent can rely on this authority as they perform actions within the scope defined by the principal.

Implied Actual Authority involves rights that are not explicitly stated but are necessary to carry out the duties that have been expressly granted to an agent. Delegated Authority refers to the transfer of authority from one party to another, which may not necessarily involve communication between the principal and agent. Apparent Authority arises when a third party reasonably believes that an agent has authority, based on the principal's actions or representations, but may not be backed by direct communication from the principal.

Understanding this distinction is crucial for recognizing how authority operates within contract law and agency relationships.