Formation of the Agency Relationship & Types of Agencies

Formation of the Agency Relationship

ü Consensual Agreement.

ü No consideration required.

ü Principal needs contractual capacity, Agent does not.

ü For any legal purpose.

Types of Agencies

ü Agency by Agreement.

ü Agency by Ratification.

ü Agency by Estoppel.

ü Agency by Operation of Law.

§ Necessaries for family.

§ Emergency.

Agency by Agreement

Formed through express consent (oral or written) or implied by conduct.

Case 31.2:  Acordia of Virginia Insurance Agency v. Genito Glenn (2002).

Agency by Ratification

Principal either by act or by agreement ratifies conduct of a person who is not in fact an agent.

Agency by Estoppel

ü Principal causes a third person to believe that another person is the Principal’s Agent, and the third person acts to her detriment in reasonable reliance on that belief.

Agency by Operation of Law

Agency based on social duty is formed in certain situations when the Agent is unable to contact the Principal.

§ Necessaries.

§ Emergencies.