An agency contract can be created by the following methods:
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Express Agreement: This is the most direct method, where both the principal and the agent explicitly agree on the terms of the agency relationship, typically in writing. This written document outlines the scope of authority, responsibilities, and any other important details.
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Implied Agreement: An agency contract can also be implied through the actions or behavior of the parties involved. If a principal allows someone to act on their behalf and the agent performs tasks that a reasonable person would consider as acting in the capacity of an agent, an agency relationship may be inferred.
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Ratification: If a person acts on behalf of another without prior authorization, the principal can later ratify that action, thereby creating an agency relationship retroactively.
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Estoppel: If a principal creates a situation where a third party reasonably believes that someone is acting as their agent (even if no formal agreement exists), the principal may be "estopped" from denying the agency relationship.
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Necessity: In some cases, an agency can arise by necessity in emergency situations where one person must act on behalf of another without prior agreement due to urgent circumstances.
When establishing an agency contract, it's important to consider the legal requirements and complexities that may vary by jurisdiction and the specific context of the relationship.