Real Estate Council of Alberta Fundamentals Practice Exam

Which type of authority is defined as written or verbal?

1. Implied authority

2. Customary authority

3. Legal authority

4. Express authority

The correct answer is: Express authority

The correct answer is express authority, which refers to a clear and direct form of authority granted through written or verbal communication. This type of authority is explicitly defined in terms of what the individual or entity is empowered to do, and it often stems from agreements, contracts, or clear instructions. For instance, if a real estate agent is specifically instructed by a policy or contract to negotiate the sale of a property, that instruction is an example of express authority. Implied authority, while related to the actions and conduct of the parties involved, exists when a principal's actions suggest that an agent has certain powers, even if those powers are not expressly stated. Customary authority involves authority based on customary practices and expectations within a certain context but doesn't rely on a formal declaration. Legal authority generally refers to the power granted by legislation or legal statute and is typically broader and not confined to verbal or written communication. By understanding express authority, individuals can navigate the implications of instructions or agreements more effectively in real estate transactions and other business interactions.