A Note on Inherent Authority

Updated 1/5/2024 PG

Before proceeding to our second "contractual base," the term inherent authority merits a note. "Inherent authority" is generally "a term used … to indicate the power of an agent which is derived not from authority, apparent authority or estoppel, but 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. This term is used often in previous restatements (e.g., Restatement (First) of Agency and Restatement (Second) of Agency) and older court opinions but has since been discarded. Id. Just know you may see it in previous restatements and older court opinions. See, for example, Restatement (Third) of Agency 2.03, cmt. c.

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