Which of the following is NOT an element of a valid agency relationship?

A valid agency relationship requires several key elements, one of which is mutual consent between the principal and the agent. This means that both parties must agree to the formation of the agency. Additionally, the principal must have the capacity to contract, implying that they are of legal age and sound mind to enter into such an agreement.

While compensation is often expected in agency relationships, it is not a mandatory element for the relationship to be valid. An agency can exist even if the agent is not compensated for their services. This distinction is crucial; it highlights that the essence of agency lies in the mutual agreement and clear understanding of roles and responsibilities, rather than financial arrangements.

The requirement for a specific purpose also plays a role in defining the agency relationship, as it outlines what the agent is authorized to do on behalf of the principal. Therefore, while compensation is common and may often be present, its absence does not invalidate the agency relationship itself.