Implied Agency
Definition
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
Example
A listing agent repeatedly gives a buyer advice on negotiation strategy, recommends inspectors, and helps the buyer structure an offer. Even without a written agreement, the agent's conduct may create an implied agency with the buyer, creating fiduciary obligations.
Exam Tip
Implied agency is a TRAP on the exam. Agents can accidentally create agency through their conduct. The best protection is to have written agreements and clearly disclose who you represent. Providing buyer-level services without an agreement = risk of implied agency.
Related Agency Terms
Agency Relationship
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
Fiduciary Duty
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
Dual Agency
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
Designated Agency
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
Transaction Brokerage
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Agency by Estoppel
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
Frequently Asked Questions
Test Your Agency Knowledge
Practice with exam-style questions to make sure you can apply Implied Agency and other agency concepts.