In which scenario does implied agency commonly arise?

Implied agency arises in scenarios where the actions or behaviors of one party lead another party to reasonably assume that an agency relationship exists. This type of agency does not rely on a formal agreement or explicit consent; instead, it is based on the context and nature of the interactions between the parties. For example, if a real estate agent presents themselves as working on behalf of a buyer during property viewings, the buyer may believe they are represented by that agent, even if there is no written contract establishing such representation.

In contrast, a written contract signed by both parties explicitly defines the agency relationship and does not fall under implied agency. Additionally, discussions about agency terms that are formal and explicit are not indicative of implied agency. Similarly, scenarios where both parties explicitly disagree on agency terms do not support the concept of implied agency, as there is no reasonable assumption made by either party regarding such a relationship.