Final answer:
An agency relationship is a partnership where one party acts on behalf of another. Termination of the agency relationship may not require both parties' consent in certain circumstances.
Step-by-step explanation:
An agency relationship is a partnership in which one party, known as the agent, acts on behalf of another party, known as the principal. In this relationship, the principal exercises control over the agent's actions, and the agent has a fiduciary duty to act in the best interests of the principal. The termination of an agency relationship typically requires the consent of both the principal and the agent.
However, the choice A, 'Termination of the agency relationship is effective only if the principal and the agent both consent,' is NOT true. In some cases, the agency relationship can be terminated unilaterally by either party, without the other party's consent. For example, if the agent breaches their duties to the principal or engages in misconduct, the principal may have the right to terminate the agency relationship without the agent's consent.