Final answer:
An agency relationship is typically voluntary, which is true. It involves a mutual agreement where the agent acts on behalf of the principal. This relationship is based on consent and is governed by agency law outlining the duties of the agent.
Step-by-step explanation:
An agency relationship is typically voluntary, which is true. An agency relationship arises when one party, the agent, agrees to act on behalf of another, the principal, usually in a business context. In this mutual agreement, the principal authorizes the agent to work under their control and on their behalf, often involving the agent making decisions and entering into contracts with third parties that legally bind the principal. The establishment of this relationship is based on consent by both the agent and the principal and usually offers some benefit to both parties.
Examples of agency relationships include a lawyer acting on behalf of a client, a real estate agent selling property for a homeowner, or a financial advisor managing investments for an investor. These relationships are governed by agency law, which outlines the fiduciary duties an agent owes to the principal, including duty of care, duty of loyalty, and duty to act in good faith.