At an open house, a listing agent has a long conversation with a prospective buyer, advising the buyer on what to offer and discussing the buyer's finances, which leads the buyer to reasonably believe the agent is working for them. Nothing is signed. Under California law, what kind of agency may the agent's conduct have created with the buyer?

Correct Answer

D) Implied agency, inferred from the conduct of the parties rather than from any agreement

California recognizes an agency formed by the conduct of the parties as readily as one formed by agreement. When a listing agent counsels a buyer on offer strategy and finances and the buyer relies on that counsel, a court can infer that both consented to a representation relationship even though nothing was signed. That is implied agency, and it carries the same fiduciary duties as an agency created by contract, which is why an undisclosed dual agency so often begins at an open house. Ostensible agency is the different idea in Civil Code section 2300, where a principal, intentionally or through want of ordinary care, causes a third person to believe someone is the principal's agent.