In the context of agency, what defines the relationship?

• A. A relationship in which one person is authorized to represent and act for another is established through the law of agency
• B. Anyone in BC acting as an agent in relation to the provision of real estate services must be licensed
• C. Agencies exist only when there is a written contract
• D. An agency cannot be terminated

Answer: (A)

An agency relationship exists when one person is authorized to represent and act for another. In real estate practice, this means the client gives the licensee authority to handle transactions on their behalf, creating a fiduciary bond where the agent must act loyally, disclose information, follow instructions, and protect the principal’s interests. The defining element is that the agent’s authority comes from the law of agency, and it can arise from express instructions or be implied by the circumstances, not just from a written contract. Agencies can be terminated by completion, mutual agreement, revocation, or events like death or incapacity. The other statements don’t define the relationship: licensing describes who may act, not how the relationship is formed; agency isn’t dependent on a written contract to exist; and an agency can be terminated.