Creation of Agency

Question 1

Agency Definition

Answer 1

Legal relationship whereby an agent is authorized to represent a principal in business dealings with third parties

Question 2

Consent

Answer 2

consent of both principal and agent is necessary to form an agency relationship

May be express or implied

Question 3

Capacity

Answer 3

Principal must have contractual capacity (no minors, incompetents)

Agent need only minimal capacity. essentially needs more than literally no mental capacity

Question 4

Consideration

Answer 4

NOT REQUIRED to establish an agency relationship. Can serve gratuitously

Question 5

Writing and Equal Dignities Rule

Answer 5

Generally no writing required

Equal Dignities Rule – agency agreements must be in writing when the agent is to enter into certain contracts within SoF

Question 6

Creation of Agency

Answer 6

Can be through agreement by principal and agent, holding out by the principal, ratification, estoppel (essentially apparent authority – third party reliance on principal’s communication), or Statute