Creation & Termination

Question 1

What are the three elements of an agency relationship?

Answer 1

• Assent - A and P must manifest sent through words or conduct.
• Benefit - A agrees to work on behalf of P and for P’s benefit.
• Control - A’s actions are subject to P’s control

Question 2

How is an agency relationship created?

Answer 2

The agency relationship is created when the principal manifests intent that another person, the agent, act on his behalf and subject to his control.

Question 3

What formalities are required to create an agency relationship?

Answer 3

None. No consideration required, but some states require a writing if it relates to an interest in property.

Question 4

Who can be a party to an agency relationship?

Answer 4

Any individual or entity can be a principal or an agent. Only minimal capacity is required to be an agent.

Question 5

How can an agency relationship be terminated?

Answer 5

Either party may unilaterally terminate the agency relationship.

Question 6

How can the agency relationship be terminated?

Answer 6

The principal may revoke the agent authority, or it may terminate by agreement, change circumstances, passage of time, breach of fiduciary duty by the agent, death of the agent, or death or incapacity of the principal after notice city agent; principles that may not terminate the agents durable power of attorney.

Question 7

What is a limitation on the termination of the agency relationship?

Answer 7

If the agent’s power is coupled with an interest, the principal cannot revoke the agent’s authority.