Final answer:
To establish an agency relationship, both the principal and the agent must agree to the terms of the agency, as it is a fiduciary relationship requiring mutual consent.
Step-by-step explanation:
In order to establish an agency relationship, c) Both the principal and agent must agree to the terms of the agency. An agency relationship is a fiduciary relationship wherein one party (the agent) agrees to act on behalf of another party (the principal) in a particular matter. Consent from both parties is essential as it signifies the agent's agreement to act for the principal and the principal's agreement to give the agent the authority to act on their behalf.
The agreement between principal and agent does not necessarily have to be formalized in writing (depending on the jurisdiction and the type of agency involved); an agency relationship can often be implied by the conduct of the parties. However, what is crucial is that there must be an understanding and intent from both sides for the relationship to be legally recognized as an agency.