Final answer:
The most common method of creating an agency is by express authorization, where a principal explicitly grants the agent authority through formal agreement.
Step-by-step explanation:
The most common method of creating an agency is by express authorization. This involves a principal explicitly granting authority to an agent to act on their behalf, through written or spoken words. Express authorization can be detailed in a formal legal document, such as a power of attorney, which outlines the specific powers granted to the agent. This method is more deliberate and formal compared to agency by operation of law, ratification, or conduct, which can occur through more implicit means or after the fact.
Ratification occurs when a principal approves the actions of an agent that were undertaken without prior permission. Agency by operation of law occurs in certain situations defined by law, such as emergencies, where an agent is able to act on behalf of a principal without express authority. Finally, agency by conduct refers to the situations where an agent is deemed to have an implied authority based on the actions and relationship between the agent and the principal.