What type of agency is determined by a formal agreement?

An express agency is established through a formal agreement between the principal and the agent. This agreement specifies the terms, duties, and powers of the agent. It is crucial for clarity and legal enforceability, as the principal explicitly outlines the scope of the agent’s authority, often in writing. This type of agency is commonly used in real estate transactions, where clear agreements detail responsibilities and expectations.

In contrast, an implied agency arises from the actions or behaviors of the parties involved, without a formal written agreement. General agency typically refers to an agent who has broad authority to act on behalf of the principal within a specific business or enterprise but may not necessarily involve a formal agreement. Brokerage agency is a less commonly used term and does not specifically describe the nature of the agreement between the principal and agent. Thus, express agency is the most accurate answer for a type of agency that hinges on a formal agreement.