Final answer:
Typically, to create an agency relationship, there needs to be a mutual agreement between the parties. This relationship can be formal or informal but requires mutual consent to establish an agent acting on behalf of a principal.
Step-by-step explanation:
To create an agency relationship, the typically needed element is A. Mutual agreement between the parties. An agency relationship is a fiduciary relationship where one party, known as the agent, acts on behalf of another party, referred to as the principal. This relationship is not necessarily formalized in writing; it can also be created verbally or implied by conduct. However, the essential requirement is that there must be a mutual understanding and intent for the agent to represent the principal and for the principal to accept the representation of the agent.
As an example, relating to social and business contracts, a business contract is a formal agreement with explicit terms and conditions agreed upon by all involved parties, similar to what individuals consent to when they enter into a contract for phone services. On the other hand, an example of an executive agreement, which does not need congressional approval, is when the president signs legally binding nuclear arms terms with a foreign nation, as in C. The president signs legally binding nuclear arms terms with Iran without seeking congressional approval.
Answer: A. Mutual agreement between the parties