An agency that occurs when a principal and an agent categorically agree to enter into an agency agreement with each other is known as a(n) ________.

Question

Quizplus · Accepted Answer

An express agency is formed when the principal and agent explicitly agree to enter into an agency relationship with each other. It can be created through oral or written communication between the parties. Option A, agency by ratification, occurs when a principal confirms and accepts the actions of someone who acted as an agent without prior authorization. Option B, implied agency, arises when an agency relationship is implied by the circumstances or behavior of the parties involved, and not by a direct agreement. Option C, apparent agency, occurs when a principal creates the appearance of an agency relationship with a third party, even though no actual agency agreement exists between the principal and agent.

An Agency That Occurs When a Principal and an Agent