Massachusetts Real Estate License Practice Test

What does implied authority allow an agent to do?

1. Delegate authority to others

2. Exercise discretion in all decisions

3. Take necessary actions to fulfill explicit authority

4. Make independent financial decisions

The correct answer is: Take necessary actions to fulfill explicit authority

Implied authority refers to the powers that an agent is assumed to possess in order to effectively carry out their explicit authority as outlined in a contractual agreement or agency relationship. Essentially, it allows the agent to perform actions that are reasonably necessary to fulfill their designated role, even if those actions are not specifically stated in the contract. For example, if an agent has the explicit authority to negotiate a lease on behalf of a client, implied authority would enable the agent to take necessary steps related to that negotiation, such as contacting potential tenants, scheduling viewings, and discussing terms with landlords. These actions support the agent’s ability to honor the explicit authority granted to them. The other choices involve aspects that are not typically encompassed by implied authority. Delegating authority often requires explicit permission from the principal, exercising discretion may be limited by the terms of the agency agreement, and independent financial decisions generally fall outside the scope of what implied authority can provide without specific consent from the principal. Therefore, implied authority is primarily about taking necessary actions to support explicit instructions and responsibilities.