Which type of authority allows an agent to act on behalf of the principal without being explicitly granted that power?

Implied authority is the type of authority that enables an agent to act on behalf of the principal without having explicit instructions or grant of power from the principal. This authority is often derived from the agent's role and the responsibilities that accompany it. For example, if an agent is hired to sell a product, it is implied that the agent possesses the authority to negotiate sales, accept payments, and carry out necessary actions to complete the transaction, even if these specific powers were not directly stated.

This authority is essential in many business relationships because it allows for flexibility and efficiency. It recognizes that agents may need to make decisions and take actions that are necessary for fulfilling their duties without having to seek prior approval for every detail. In the context of the relationship between the principal and the agent, implied authority helps facilitate smooth interactions and decision-making processes necessary for operation.