An express agency is an agency that authorizes an agent to act on behalf of a principal. The most common agency type, it is called an express agency because it expresses the relationship between both parties. In this agreement, authority is directly granted to the principal; the authority of the agent extends only to powers granted in the agency agreement. Express authority refers to that authority granted to an agent to perform certain activities.
For example, a principal may grant an agent the right to purchase a property on his or her behalf, contingent on the fact that the loan utilized for the purchase is below 5%. If the loan retained by the agent is 5.7%, the agent does not have the authority to purchase the property.
Authorization of these specific activities must be in writing (as opposed to verbal conversation) otherwise they are not enforceable.
An express agency is created only when an agreement between the principal and agent occurs. The agreement must state the parties involved, the commission structure, and a beginning and end date. In such an agreement, both parties of the agreement express their desire to work with one another which is why it is called express. In some instances, an express agency can be verbal, however this is not advised as it will be difficult to prove the creation of the agreement.
