Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is necessary to form express agency agreements?

1. Implied action

2. Explicit communication

3. Written documentation

4. Mutual consent

The correct answer is: Mutual consent

To form express agency agreements, mutual consent is essential. In the context of agency relationships, mutual consent refers to both the principal and the agent agreeing to the terms of the agency relationship. This agreement can be expressed verbally or in writing, but it must be clear that both parties understand and accept the roles, responsibilities, and obligations involved. While written documentation may provide clarity and serve as proof of the agreement, it is not a strict requirement for the formation of express agency—what truly drives the establishment of this relationship is the mutual consent to create an agency. Similarly, explicit communication is important but does not capture the necessity of both parties agreeing to the relationship. Implied action, on the other hand, relates more to implied agency, which occurs without mutual consent being explicitly communicated. Hence, mutual consent is critical as it ensures that both parties recognize and intend to enter into an agency relationship.