Wisconsin Real Estate Sales Practice Exam

Which type of agency relationship is formed through explicit communication?

1. Implied Agency

2. Express Agency

3. Universal Agency

4. Special Agency

The correct answer is: Express Agency

The formation of an express agency relationship occurs through explicit communication between the parties involved, where the principal clearly informs the agent of their authority to act on their behalf. This type of agency is characterized by a written or oral agreement that outlines the specific terms and conditions of the relationship, making the agent's authority unmistakable and well-defined. Express agency provides clarity for both the principal and the agent regarding the scope of authority, responsibilities, and any compensation that may be involved. This differs from implied agency, where the relationship is created by the actions or behaviors of the parties rather than through a formal agreement. Other agency types, like universal or special agency, pertain to specific scopes of authority but do not focus on the explicit communication element as the defining factor. Thus, express agency is uniquely identified by its clear, direct communication establishing the agency's existence and terms.