How can an agency relationship be established?

An agency relationship can be established in multiple ways, and the correct response highlights these various methods. An agency can be formed through express agreement, where both parties clearly state their intentions and agree to the agency terms in a definitive manner. This can be verbal or written.

Additionally, an agency can also arise through implied agreement, which occurs when the actions or circumstances suggest that one party is acting on behalf of another, even without a formal agreement. For example, if one person consistently handles another person's affairs, it may be inferred that an agency relationship exists.

Ratification is another means of establishing an agency relationship, which happens when a principal accepts the actions taken by an agent on their behalf, even if those actions were not previously authorized. By accepting those actions, the principal effectively creates an agency relationship retroactively.

This comprehensive understanding of how agency can be formed reflects the complexity of real-world interactions where formalities do not always apply, making this answer the most accurate. Other options, such as limiting agency formation to only written contracts, verbal agreements, or business licenses, do not encompass the full spectrum of how an agency relationship can be established.