A broker acting as an agent for a principal has as much authority as:
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the principal actually or ostensibly confers upon them.
an attorney-in-fact.
An attorney-in-fact holds authority under a power of attorney, which is a specific legal instrument granting broad or specific powers; a real estate broker's authority is not equivalent to or measured by an attorney-in-fact's authority, which is a separate legal relationship governed by different statutes.
the broker chooses to take.
A broker cannot simply choose to take as much authority as they wish — this would eliminate the principal's control over the agency relationship and expose principals to unlimited liability for unauthorized acts, which directly contradicts the foundational principle of agency law that authority flows from the principal.
they choose to accept as limited by the statute of frauds.
The Statute of Frauds (Civil Code §1624) requires certain contracts to be in writing to be enforceable, but it does not define or limit the scope of a broker's authority within an agency relationship; conflating the Statute of Frauds with agency authority rules reflects a fundamental misunderstanding of two distinct legal doctrines.
Why is this correct?
Answer A is correct because California Civil Code §2315 explicitly states that an agent has such authority as the principal actually or ostensibly confers upon them, making the scope of authority entirely dependent on the principal's grant. This is the foundational rule of agency authority in California law — the principal controls the scope of the agent's power, whether through express authorization, implied authorization arising from the nature of the task, or ostensible authority created by the principal's conduct toward third parties. The broker cannot unilaterally expand their own authority beyond what the principal has conferred.
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