What kind of agency is created through a written or verbal agreement?

What kind of agency is created through a written or verbal agreement?

• A. Implied Agency
• B. Express Agency
• C. Agency by Necessity
• D. Agency by Ratification

Answer: (B)

The correct answer is that express agency is created through a written or verbal agreement between the principal and the agent. This type of agency is established when the principal clearly defines the relationship and the agent's authority to act on their behalf. This clarity is often documented in writing — for example, in a real estate listing agreement — but it can also be established verbally if the terms are adequately discussed and agreed upon. In express agency, both parties have a mutual understanding of the responsibilities and expectations involved, making it a more straightforward and legally binding arrangement. The clear communication of duties and powers protects both the agent and the principal, allowing for better trust and efficiency in the transactions that follow. Other forms of agency, such as implied agency, agency by necessity, and agency by ratification, do not typically involve a clear, mutual agreement. Implied agency arises through the actions of the parties rather than explicit terms, agency by necessity occurs in urgent situations where the agent must act without prior consent, and agency by ratification involves the principal confirming an action performed without prior agreement. These distinctions highlight why express agency is recognized for its explicit and formalized nature.

The correct answer is that express agency is created through a written or verbal agreement between the principal and the agent. This type of agency is established when the principal clearly defines the relationship and the agent's authority to act on their behalf. This clarity is often documented in writing — for example, in a real estate listing agreement — but it can also be established verbally if the terms are adequately discussed and agreed upon.

In express agency, both parties have a mutual understanding of the responsibilities and expectations involved, making it a more straightforward and legally binding arrangement. The clear communication of duties and powers protects both the agent and the principal, allowing for better trust and efficiency in the transactions that follow.

Other forms of agency, such as implied agency, agency by necessity, and agency by ratification, do not typically involve a clear, mutual agreement. Implied agency arises through the actions of the parties rather than explicit terms, agency by necessity occurs in urgent situations where the agent must act without prior consent, and agency by ratification involves the principal confirming an action performed without prior agreement. These distinctions highlight why express agency is recognized for its explicit and formalized nature.