Which term describes an agency that is created without a formal agreement?

Implied agency refers to a type of agency that arises when the actions or conduct of the parties involved suggest that a relationship exists, even in the absence of a formal written agreement. This can occur in real estate transactions where a buyer or seller's behavior leads to the reasonable conclusion that an agency relationship has been established.

For example, if a real estate agent shows a home to prospective buyers and they act in a manner that demonstrates they are relying on the agent's expertise, an implied agency could be inferred. In such cases, the agent may be obligated to act in the best interests of the clients, even if a contract has not been formalized.

In contrast, express agency is characterized by a clear and definitive agreement, either written or verbal, that outlines the relationship and responsibilities of the agent and the principal. Special agency refers to a type of agency where the agent has limited authority to act on behalf of the principal for specific tasks, and universal agency gives the agent broad powers to act on behalf of the principal across a wide range of matters.

Thus, the term that best describes an agency created without a formal agreement is clearly implied agency.