Which of the following are elements of an agency relationship?

• A. Assent (informal agreement)
• B. Benefit to the principal
• C. Control by the principal (supervise)
• D. All of the above

Answer: (D)

Agency relationships come into existence only when three things happen: the principal consents to appoint an agent, the agent agrees to act on behalf of the principal, and the principal has the ability to control the agent’s actions. Each piece plays a part in making the relationship real.

Assent is the starting point—the principal’s manifestation of intent to authorize someone to act for them, and the agent’s agreement to do so. Without that mutual agreement, there isn’t a true agency.

Benefit to the principal ties the relationship to the principal’s interests—the agent’s actions are undertaken to benefit the principal, not for the agent’s own purposes. This focus on advancing the principal’s goals is what distinguishes agency from other kinds of relationships.

Control by the principal is what gives the principal the power to direct how, when, and by what means the agent carries out tasks. This supervision is a hallmark of agency and helps ensure the agent’s actions align with the principal’s objectives.

Because all three elements are present, the relationship is properly an agency, which is why the option including all of the above is the correct choice.