What is one way to form an agency relationship?

What is one way to form an agency relationship?

• A. Formal court settlement
• B. Written or oral agreement
• C. Change of ownership
• D. State approval

Answer: (B)

An agency relationship can be formed through a written or oral agreement between the principal and the agent. This means that the principal grants authority to the agent to act on their behalf in business dealings or legal matters. Such agreements can range from formal contracts to informal arrangements, and they do not necessarily require a specific format, though having them in writing can provide clarity and serve as evidence of the terms agreed upon. The essence of forming an agency relationship lies in the mutual consent between the parties involved, where one party (the agent) agrees to act for and under the control of another party (the principal). This foundational element is critical for establishing the rights and responsibilities of both parties, making it a key aspect of agency law.

An agency relationship can be formed through a written or oral agreement between the principal and the agent. This means that the principal grants authority to the agent to act on their behalf in business dealings or legal matters. Such agreements can range from formal contracts to informal arrangements, and they do not necessarily require a specific format, though having them in writing can provide clarity and serve as evidence of the terms agreed upon.

The essence of forming an agency relationship lies in the mutual consent between the parties involved, where one party (the agent) agrees to act for and under the control of another party (the principal). This foundational element is critical for establishing the rights and responsibilities of both parties, making it a key aspect of agency law.