Agency

An agency relationship requires which of the following essential elements?

AA written agreement, compensation, and a licensed agent
BConsent of both principal and agent, capacity, and a legal purpose✓ Correct
CA license, E&O insurance, and a written contract
DMLS membership, written agreement, and state approval

Explanation

An agency relationship requires mutual consent (the principal appoints and the agent agrees to act), legal capacity of both parties, and a lawful purpose. While a written agreement is preferred and required for some types, oral agency can exist.

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