Champions Law of Agency Practice Test

Implied agency is the correct answer as it refers to a type of agency that arises without a formal or express agreement between the parties. This agency is established through the actions, behavior, or circumstances surrounding the relationship between the principal and the agent, rather than through written or verbal contracts. For instance, if a person regularly accepts deliveries on behalf of another and the parties continue this practice without a formal agreement, an implied agency may be established based on their conduct and understanding.

In contrast, universal agency involves a broader scope of authority where the agent is authorized to act on behalf of the principal in all matters. This type of agency typically requires a clear and express agreement. Special agency is a limited agency where the agent acts on behalf of the principal for a specific purpose or transaction, and this again generally involves a clear contract outlining those terms. General agency allows the agent to act on behalf of the principal in a range of matters, but such authority is also typically defined by an explicit agreement. Thus, it is implied agency that operates without such express agreements.