An agency relationship refers to a legally recognized association between two parties in which one party, known as the principal, grants authority to the other party, known as the agent, to act on their behalf. There are several ways in which an agency relationship can be created.
One way is through express agency, which involves a direct and explicit agreement between the principal and the agent to enter into an agency relationship. This can be done orally or in writing, and may include a formal contract outlining the terms and conditions of the agency relationship.
Another way to create an agency relationship is through implied agency, which occurs when the actions of the principal and the agent lead a reasonable person to conclude that an agency relationship exists. This can be established through the actions and conduct of the parties, as well as the surrounding circumstances.
A third way to create an agency relationship is through apparent agency, which occurs when the principal holds out the agent as having authority to act on their behalf, even if no actual agency relationship exists. This can happen if the principal leads others to believe that the agent has authority to act on their behalf, even if this is not the case.
In addition to these traditional ways of creating an agency relationship, modern technology has also created new opportunities for creating agency relationships through digital means. For example, online marketplaces such as Etsy or eBay allow individuals to sell goods on behalf of a principal, creating an agency relationship through the use of online contracts and terms of service.
Overall, there are various ways in which an agency relationship can be created, ranging from explicit agreements to more subtle forms of implied or apparent agency. It is important for both the principal and the agent to clearly understand the terms and conditions of the agency relationship in order to avoid misunderstandings and potential legal disputes.