What is the most common form of agency known in business law?

The most common form of agency in business law is express agency. This type of agency arises when a principal explicitly grants authority to an agent to act on their behalf, typically through a written or oral agreement. Express agency is prevalent because it clearly delineates the roles and responsibilities of both the principal and the agent, providing a solid framework for their relationship. This clarity facilitates trust and understanding, ensuring that both parties are aware of the extent of the authority granted.

In express agency, the principal can specify the tasks the agent is authorized to perform, which makes it an ideal choice for businesses that require precise and defined actions from their agents. This form of agency is frequently used in various business transactions, such as hiring agents in real estate, insurance, or sales, where explicit terms are beneficial for all involved parties.

Understanding express agency is essential because it forms the basis of many business relationships and transactions, emphasizing the significance of clear communication and defined authority within the context of agency law.