Creation of Agency and Agency Agreements

How Agency Is Created

Agency can be created four ways: (1) Express agency - a written or oral agreement between principal and agent. Real estate listing agreements and buyer representation agreements create express agency. (2) Implied agency - created by the conduct of the parties, not by a written agreement. Dangerous for licensees because you might accidentally create agency with someone you didn't intend to represent. (3) Ostensible agency (agency by estoppel) - when the principal leads a third party to reasonably believe someone is their agent, the principal is bound even without actual agreement. (4) Ratification - when a principal later approves an unauthorized act of an agent, retroactively creating agency for that act.

Civil Code §2298-2310