Which of the following is NOT a way to create an agency relationship?

Study for the CLEP Business Law Test. Engage with flashcards and multiple choice questions, each question has hints and explanations. Prepare effectively for your exam!

Creating an agency relationship typically involves actions that clearly establish one party (the agent) to act on behalf of another (the principal). Options such as express agreements, operation of law, and implied agreements all represent recognized methods of forming this relationship.

An express agreement is a clear, communicated authorization, where both parties understand and acknowledge the agency relationship explicitly. An agency can also be created by operation of law under certain circumstances, such as when a parent is deemed to act on behalf of their minor child. An implied agreement arises from the conduct of the parties involved, where the agent’s actions indicate an understanding of their role.

On the other hand, assurances given to a third party do not establish an agency relationship on their own. While an agent might provide assurances to third parties, these actions do not create the relationship between the agent and the principal unless there is already an existing agreement. The key point is that reassurance to third parties lacks the necessary direct acknowledgment or consent from the principal, thus failing to satisfy the criteria required for establishing an agency relationship.

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