Which statement is true regarding an implied agency agreement?

An implied agency agreement is established through the actions of the parties involved rather than through explicit verbal or written agreements. In real estate, this means that if a licensee acts in a manner that demonstrates a mutual understanding of a principal-agent relationship, such as a buyer treating the agent as if they were their representative in negotiations, an implied agency can occur. This often happens unconsciously, where the behaviors signal that the agent is acting on behalf of the client, even without formal documentation.

This form of agency is important because it showcases the dynamic nature of real estate relationships where actions can create obligations and rights, even when a formal contract hasn't been executed. Understanding how implied agency works is crucial for agents, as they must recognize that their conduct can unintentionally establish agency relationships, thus making them responsible for their actions and the implications that arise from them.