How an agency is created: express, implied, ratification, and estoppel

Four ways agency arises

Agency lets an agent act on behalf of a principal in dealings with others. Distinguish the source of authority from its scope: permission to perform one task is not permission to perform every task. These are general agency principles; a particular transaction may also require a writing or other formalities.

Express agency rests on an agreement stated in words, orally or in writing. An owner tells a broker to negotiate a proposed lease, and the broker agrees. The words supply the authorization, but authority to negotiate does not itself include authority to sign.

Implied agency is inferred from conduct and circumstances showing mutual assent. An owner repeatedly asks a manager to arrange routine repairs and knowingly lets the manager handle them. That pattern can show authority even without an express appointment. Implied authority can also cover acts reasonably necessary to carry out expressly authorized work. It does not mean unlimited discretion.

Ratification is a principal's later adoption of an act initially done without authority on the principal's behalf. Suppose someone orders a repair for an owner without permission. The owner learns the material facts and affirmatively adopts the transaction. Knowing, voluntary acceptance of its benefits can also show adoption. Ratification generally gives the act the effect of prior authorization; it does not grant unrestricted authority for future acts. A principal cannot adopt a transaction's benefits while rejecting its attached obligations.

Estoppel, or ostensible agency, concerns appearances attributable to the principal. An owner presents a person to a vendor as authorized to order repairs. The vendor reasonably relies on that appearance and supplies work. Even if private instructions withheld actual authority, the owner may be prevented from denying authority against that vendor. The supposed agent's unsupported claim is not enough: look for the principal's conduct and the third party's reasonable reliance.

Sort by evidence and timing

Express means words; implied means conduct showing assent; ratification means later informed adoption; estoppel means a principal-created appearance plus reasonable third-party reliance. Implied actual authority concerns what the principal and agent manifest to each other. Ostensible authority concerns what the principal leads a third party reasonably to believe. The same facts can involve more than one category, so identify what the question asks you to explain.