All of the following actions create an agency relationship, except:
Question & Answer
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Subornation.
correct answer: Subornation can create an agency relationship. When someone (subornator) induces or causes another to breach their duty to a principal, they may be held liable as if they were the agent, effectively creating an agency relationship by estoppel.
Implication.
correct answer: Implication can create an agency relationship through conduct and circumstances. When parties' actions reasonably indicate an intention to create an agency relationship, law may recognize it even without explicit agreement.
Ratification.
correct answer: Ratification can create an agency relationship. When a principal accepts benefits from an unauthorized act and fails to repudiate it, they retroactively approve the agency relationship from the time of the original act.
A verbal agreement.
Why is this correct?
A verbal agreement alone does not create an agency relationship in California. Agency requires a written agreement signed by the principal when dealing with real property interests. This statutory requirement (California Civil Code § 1624) protects consumers by ensuring clear documentation of agency relationships.
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