Which of the following is not true of the establishment of a principal-agent relationship?
A. The law requires a formal expression of an agency relationship between parties.
B. Parties to an agency relationship must have an understanding that the principal is in control.
C. Conduct alone can form the basis for an agency relationship.
D. Courts use an objective standard for agency relationships in determining the relationship between parties
Answer (2)
The statement that is not true about the establishment of a principal-agent relationship is option A, which claims that the law requires a formal expression of this relationship. Agency relationships can exist without formal contracts, being established through verbal or implied conduct instead. Therefore, a formal expression is not necessary for an agency to exist.
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The statement that is not true about the establishment of a principal-agent relationship is that the law requires a formal expression of this relationship. Agency relationships can be formed through verbal agreements or conduct alone. Therefore, a formal contract is not necessary for an agency to exist. ;
