In some states, how must an agency be created?

An agency must be created through a written agreement in many states, including Maine. This is because a written agreement provides clear evidence of the terms and conditions of the agency relationship, which helps to protect all parties involved. It outlines the responsibilities and expectations of the agent and the principal, reducing ambiguity that can arise from oral agreements or implied actions. A written contract ensures that there is a mutual understanding and helps to prevent disputes regarding the agency's authority and scope of work.

In contrast, while oral agreements and implied actions can sometimes create agency relationships, they lack the clarity and enforceability of a written contract. Moreover, relying on a license application does not establish an agency relationship but rather pertains to the legal permission to practice real estate. Hence, the requirement for a written agreement is fundamentally important in formalizing the agency relationship and providing legal protection.