Which of the following forms of authority binds the principal?

• A. Express authority
• B. Implied authority
• C. All of the above
• D. Apparent authority

Answer: (C)

All forms—express authority, implied authority, and apparent authority—can bind the principal, each in its own scenario. Express authority is the direct grant of power to act, such as the principal telling the agent to sign contracts on their behalf. Implied authority arises from the agent’s role and the reasonable duties they must perform to carry out their tasks or to carry out the express instructions. Apparent authority occurs when the principal’s words or conduct lead a third party to reasonably believe the agent has authority, so the principal is bound by the agent’s actions even if the agent lacks actual authority. Because any of these pathways can create binding obligations for the principal, the best answer is all of the above.