In commercial real estate transactions involving business entities, conveyances are done by agents of the company. It’s important to ensure that a corporate agent has the required authority to transact on behalf of the business. An agent’s authority can be actual, implied, or apparent. In this article, we’re going to briefly explain each of those three types of authority.
The first type of legal authority is actual authority, which is defined as authority that has been intentionally given to the agent by the principal.
The next type of legal authority is implied authority, which results because of an agent’s relationship with the principal or the principal’s business. For example, a principal may not have intentionally authorized an employee to make purchases for the business entity. But if the principal has repeatedly paid off debts incurred by the employee, the principal may inadvertently have created implied legal authority in that employee.
The final type of legal authority is apparent authority. Apparent authority is the “power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from, and in accordance with, the other’s manifestations to such third persons.” Apparent authority may arise if a principal acts in a way that would make a third party reasonably believe that the agent had authority.
Commercial Partners Title Company
Commercial Partners Title Company has decades upon decades of experience in the commercial title industry. During our time in business, we have developed a reputation as being experts in the field of commercial transactions. Our team of escrow agents, title closers, and underwriters can help you through all the details of your next commercial transaction. Contact us today at our downtown Minneapolis office to learn more about our full array of service offerings and see how we can help!