An agency relationship based on a formal agreement between the parties, either written or verbal, is

• A. Express agency
• B. Implied agency
• C. Ostensible agency
• D. Agency by necessity

Answer: (A)

Express agency is created by a clear agreement between the principal and the agent, either in writing or orally, that authorizes the agent to act on behalf of the principal within a defined scope. This explicit consent establishes the relationship and the agent’s authority. It’s different from implied agency, which comes from conduct or circumstances rather than a stated agreement, and from ostensible agency, which occurs when a principal’s actions lead a third party to believe the agent has authority even without a real agreement. Agency by necessity arises only in urgent situations where action is needed to protect property or interests, not from a formal contract. Because the scenario describes a formal agreement, either written or verbal, it aligns with express agency.