An agency relationship based on actions of the parties

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

Answer: (B)

Implied agency is formed by conduct rather than a written or spoken agreement. When the principal and the agent behave in ways that show the agent has authority to act on the principal’s behalf, the agency relationship is considered to exist even without explicit terms. For example, if a property owner consistently allows someone to handle showings, negotiate offers, and sign documents on their behalf, a court can infer that authority to act as the owner’s agent has been granted. This type of agency relies on how the parties act and how others reasonably rely on those actions.

This differs from express agency, which comes from a clearly stated agreement. It also differs from ostensible (apparent) agency, which arises when a third party reasonably believes an agency exists based on the principal’s representations to that third party. Agency by necessity is about urgent, emergency action to protect the principal’s interests, even without prior authorization.