Fiduciary‌ ‌Authority‌ ‌v/s‌ ‌Actual‌ ‌Authority‌ ‌ ‌

Fiduciary word derives from word “trust” where someone has any power to act on behalf of another but for their best interest or act on behalf of the beneficiary. In law fiducial authority establishes where there’s any implied assumptions. On contrary actual authority is established through legal agreement between two parties by signing any agreement or contract through consensual agreement. 

Now above definition is as per contract act or agency act which establishes proper criteria of authority and process of how it is established over any person, over any property or to initiate any transaction. In practicality people get confused between two different types of authorities either they think actual authority is real authority and fiduciary authority is derived from it but they forget basic if fiduciary authority is given to act on someone’s behalf there are certain things only, they can do with proper permission and only those things which are agreed by the principal. 

This argument of fiduciary v/s actual authority do not just apply in legal matters in fact it applies in real-life matters as well, where someone who has actual authority might be superseded by someone who has fiduciary authority and mostly confuses people. 

This kind of confusion can be very well understood by the following examples,  

Scenario 1

John entered in class room he is just newbie in class and the remaining class doesn’t know about this. From his attire and looks, class assumed he is faculty and stood for him. Now, he got carried away and took fiduciary or fictitious control over the whole class and starts speaking over something and continued till actual faculty enters into class. 

In the above scenario actual authority is with faculty members not with John, he was just a student in the class. 

Scenario 2 

There are guys in party and all three are focusing on one new girl who has got all attention in party but when she got to know about their gaze, her close friend passed by her and hugged her as if he is her boyfriend and all other guys stopped chasing her. 

In above scenario that friend doesn’t have any actual authority, he acted as friend and three guys standing in corner assumed that he is her boyfriend so it created implied or fiduciary assumption. 

Explanation of both authorities and it’s pros and cons:

In above scenarios it is very easy to understand what is actual and what is fiduciary or implied authority, but question is when it is not understood in proper way it starts confusing people and starts affecting people as well. Actual authority is derived through any constitutional power like if any Prime minister is talking about something he has constitutional authority, similarly if any faculty is saying something they have authority of lecturer. 

Now, in relationships actual authority is derived from blood relations, or through contracts which is paper work to establish any relation or authority over someone. Further, implied authority which is often assumed by anyone is dangerous because it can cause harm to public or people who he thinks under his control. This kind of authoritative person could be anywhere who is establishing his fiduciary authority which is not derived from actual authority. Even in actual authority scenario, there are extends or limits to which agent can act on behalf of principal or his or her guardian or nominees. 

This game of authorities is always confusing or misunderstood and sometimes people mess up things under the assumptions of having actual authority though they didn’t even have implied one. They frame, they label, they defame, they degrade, they cross boundaries and they even forget they are even humans and do all bad things under the assumption of fiduciary authority and when in actual they realize they don’t have authority or control on that particular matter, property, object or subject then they try to find excuses or reasons of their irrational actions or behaviors.