A Note on Inherent Authority

9/1/2025 pdw

Inherent authority or inherent agency power refers to power derived "solely from the agency relation and exists for the protection of persons harmed by or dealing with a servant or other agent." Restatement (Third) of Agency 2.01, cmt. b.

For example, where an agent is given authority to run a pub, but the principal expressly limits the agent from purchasing cigars---a task commonly done by pub managers at the time. Someone working with pub manager would expect the manager to have this authority, so the court may apply the doctrine of inherent authority to find that the cigar contract is enforceable against the principal. Watteau v. Fenwick, 1 Q.B. 346 (1892).

This term has fallen out of favor because most of the situations it covers are often adequately covered by other terms. For example, the pub case may reach the same results by analyzing it for apparent authority.

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