The term "actual authority" refers to the authority of an agent that derives from the consent of the principal. Actual authority may be derived from the express words of the principal. Actual authority may also come in the form of implied authority, which is that authority that is not expressly granted in words but is inferred from the words used by the principal together with the context.
Actual authority should be distinguished from apparent authority. In both cases, the scope of the authority is determined by reasonable belief about a purported agent's authority. The key distinction is that actual authority is governed by the reasonable belief of the purported agent about his or her authority, whereas apparent authority is created by the reasonable belief of the third party as to the purported agent's authority.