These rules and regulations impose special requirements on the agency relationship in the real estate context. They have the effect of limiting, redefining and superseding the common and statutory laws which would otherwise apply in non-real estate situations. Further adding to the complexity of the laws governing agency in the context of real estate transactions, is the written agreement between the broker and his principal. Thus, it is the interrelationship between common law, statutory law, and regulations applying to real estate matters which govern the scope of the broker-principal relationship in a real estate transaction. Nevertheless, certain basic principles apply to the agency relationship throughout the United States.
Appointment means that the principal gives express authorization to the agent.
Under both common and statutory law, this requires a writing when the sale of real estate is involved. Estoppel means that if the principal causes third persons to believe that someone is his agent and that third party deals with the agent, then the principal cannot deny the agency relationship even though it did not exist in fact. Ratification means that if a person having no authority whatsoever, purports to act as an agent and the purported principal later adopts the acts of that agent, an agency relationship has retroactively been created. An agent has the powers which are conferred upon him by the principal. In addition, the agent has all such powers as are necessary, proper, or usual to enable him to accomplish the purpose of the agency.