What is the term for the authority given to an agent that is not formally written or communicated?

Implied authority refers to the power that an agent possesses, which is not explicitly outlined in a written agreement or communicated directly. This type of authority arises from the nature of the agent's role and the actions they are expected to take on behalf of the principal. For example, if an agent is assigned to perform certain tasks that are customary within their industry, it is understood that they have the authority to make decisions and take actions that are necessary to fulfill those tasks, even if those specific powers are not documented.

In a practical setting, if a principal employs someone to manage a retail store, that employee would have implied authority to make purchases necessary for the store's operation, like ordering supplies, because it is expected that a manager in that position would need to make such decisions. This is important in maintaining smooth business operations and allows agents to act effectively on behalf of the principal without needing continual approval for every decision.