The key feature of an agency relationship is that:
A)the principal will always make decisions that are in the best interests of the agent.
B)a company will allow another firm to take on its name,and act as an agent in doing business.
C)the decisions by the agent will always improve the position of the owners of a firm.
D)one party passes the responsibility for making decisions to another party.

Question

Quizplus · Accepted Answer

An agency relationship involves one party (the principal) delegating decision-making authority to another party (the agent). The key feature is that the principal relinquishes control over some aspects of the business to the agent, who is expected to act in accordance with the principal's interests. However, this does not guarantee that the decisions made by the agent will always improve the position of the owner (as stated in option C) or that the principal will always act in the best interests of the agent (as stated in option A). Option B is not a necessary element of an agency relationship, although it is one possible form of agency where a company allows another firm to act on its behalf using its name.

The Key Feature of an Agency Relationship Is That