What is implied agency?

Implied agency refers to an agency relationship that is established through the actions or behaviors of the parties involved, rather than through a formal written contract or explicit agreement. This type of agency arises when one party’s conduct suggests to another party that they have the authority to act on their behalf. For example, if a property owner allows a real estate agent to show their home without a formal agreement, the actions taken by both parties may suggest that an agency relationship exists.

In this context, implied agency can often occur in business dealings or professional services where parties may not have a formalized understanding, but their interactions lead one party to reasonably believe that the other has the authority to act for them. This understanding is crucial in determining liability and accountability in various transactions as once implied agency is established, it creates responsibilities and expectations between the parties involved.

Written agreements are essential in forming express agencies, but implied agencies rely on contextual cues rather than documentation. The other options present concepts that are either contrary to the nature of implied agency or pertain to different circumstances that do not accurately reflect how implied agency is determined.