What are the three factors of an agency relationship?

What are the three factors of an agency relationship?

• A. Assent, Benefit, and Control
• B. Consent, Liability, Authority
• C. Trust, Benefit, Confidentiality
• D. Control, Fees, Supervision

Answer: (A)

Agency relationships come from three elements: assent (mutual agreement to form the relationship and to have the agent act on behalf of the principal), benefit (the agent’s actions are for the principal’s advantage), and control (the principal has the right to direct and oversee the agent’s work). When all three are present, an agency relationship exists, with the principal able to control the agent’s actions to achieve the principal’s goals. Assent can be express or implied by conduct, showing both parties agree to the arrangement. Benefit means the agent’s duties and actions are for the principal’s gain, not for the agent’s own purposes. Control means the principal has authority to supervise and direct how the agent performs the tasks. Other options mix elements that aren’t required to establish agency, such as liability, confidentiality, or fees, or substitute terms like authority or supervision that don’t alone define the relationship.

Agency relationships come from three elements: assent (mutual agreement to form the relationship and to have the agent act on behalf of the principal), benefit (the agent’s actions are for the principal’s advantage), and control (the principal has the right to direct and oversee the agent’s work). When all three are present, an agency relationship exists, with the principal able to control the agent’s actions to achieve the principal’s goals.

Assent can be express or implied by conduct, showing both parties agree to the arrangement. Benefit means the agent’s duties and actions are for the principal’s gain, not for the agent’s own purposes. Control means the principal has authority to supervise and direct how the agent performs the tasks.

Other options mix elements that aren’t required to establish agency, such as liability, confidentiality, or fees, or substitute terms like authority or supervision that don’t alone define the relationship.