Better Hawaii Adjuster's Exam Practice

Express authority refers specifically to the power that is granted to an agent through direct communication, which can be in writing or verbally. When an agent is named in a contract, this indicates that the principal has explicitly authorized the agent to act on their behalf for specified matters. This direct assignment clearly communicates the breadth and limits of the agent's authority as defined by the principal's wishes.

In contrast, a verbal agreement may not always provide clear, documented authority and can lead to misunderstandings about the scope of the agent's powers. Assumptions based on previous actions pertain more to implied authority, where an agent might act based on past behaviors or expectations but lacks explicit approval for the current action. Acting without any guidelines suggests a lack of authority entirely, as it implies the agent is operating independently of the principal's wishes.

Consequently, naming an agent in a contract is the most robust form of express authority, as it leaves no ambiguity regarding the agent's responsibilities and the specific powers they are granted.