Final answer:
An agency relationship formed through a clear oral or written agreement is referred to as an Express agency. This is explicitly stated in a contractual agreement between the principal and the agent. Option B is correct.
Step-by-step explanation:
Express agency emerges from a formal agreement, whether verbal or written, established between a principal and an agent. This clear and explicit arrangement outlines the terms and conditions governing the agency relationship, leaving no room for ambiguity. Unlike implied agency, where the actions of the parties imply mutual consent, express agency is characterized by the overt articulation of the agency's parameters.
In this type of agency, both principal and agent explicitly state their intentions, responsibilities, and the scope of authority granted. This direct and transparent approach enhances clarity and helps prevent misunderstandings between the parties involved. Express agency agreements serve as a foundational framework for the working relationship, specifying the agent's duties and the extent of decision-making authority delegated by the principal.
Distinct from express agency, implied agency arises implicitly from the conduct of the parties, showcasing a more tacit understanding. Meanwhile, statutory agency results from legal mandates, and common agency occurs when an agent is authorized to represent two principals in a singular transaction. The diversity of agency types reflects the versatility needed to accommodate various circumstances and legal requirements within the realm of agency relationships.