Which agency is established based on the actions of the parties involved?

Implied agency is characterized by the actions of the parties involved rather than a formal agreement. In situations where there is no explicit contract indicating an agency relationship, implied agency occurs when the behavior of the parties suggests a mutual understanding. For instance, if a buyer acts in a manner that leads a seller to believe that a real estate agent is representing their interests—such as through communications or actions—the implied agency can be established even without a written contract.

This concept is crucial in real estate transactions, as it underscores the importance of understanding both verbal cues and actions that may indicate the establishment of an agency relationship. This can come into play in various scenarios, particularly in informal interactions where the intentions of the parties may not be explicitly stated.

The other types of agency—express, bilateral, and unilateral—rely on more formalized agreements. Express agency involves a clear, written contract; bilateral implies that both parties have specific obligations to each other, creating mutual responsibilities; and unilateral agency typically involves one party granting authority to another without any obligations in return. Hence, these definitions highlight why implied agency is distinct in its reliance on the behaviors and actions of the parties involved.