Creation of an Agency Relationship

Question 1

Requirements for Creating an Agency Relationship

Answer 1

Principal must manifest intent to grant authority to Agent to act (1) on Principal’s behalf and (2) subject to Principal’s control.

Agent must consent to Principal’s grant of authority.

Principal must have contractual capacity. Agent must have minimum mental capacity.

Question 2

How can Principal and Agent manifest intent and consent to enter into agency relationship?

Answer 2

Expressly (written or spoken words) or impliedly (by conduct)

Question 3

Requirements of Agency by Ratification

Answer 3

At time of ratification, Principal must:
+ have contractual capacity
+ have knowledge of all material facts concerning the transaction
+ manifest assent (words or conduct) that agent’s unauthorized transaction is now binding on the principal.