What determines whether actual authority has been granted to an agent?

The determination of whether actual authority has been granted to an agent primarily relies on the outward manifestations made by the principal. Actual authority arises when a principal indicates—through words or conduct—that the agent has the authority to act on their behalf. This can include explicit instructions or actions that demonstrate the principal's intention to empower the agent in specific matters.

For actual authority to be effective, the principal must communicate clearly and consistently so that the agent and third parties can reasonably rely on that authority. The focus is on what the principal has conveyed rather than the agent's interpretations or previous experiences. This means that if a principal leads others to believe that the agent is acting with authority, the agent is considered to have that authority, assuming the third parties are aware of or can reasonably perceive those manifestations.

Other choices focus on factors that do not directly confer actual authority. For example, an agent's intuition about their role relies on personal interpretation rather than the principal's intentions, and the agent's past performance, while potentially informative, does not automatically establish authority without clear communication from the principal. Thus, the principal’s outward manifestations are the key determinant in establishing actual authority.