What type of agency is inferred from the conduct of the parties involved?

Implied agency arises from the behavior and actions of the parties involved rather than from a formal agreement or contract. In situations where one party acts in a way that suggests to another that they have the authority to act on their behalf, this relationship is considered implied. This can occur through consistent patterns of behavior where the agent's authority is recognized by the principal, even if it has not been explicitly stated. Such situations often occur in everyday transactions where social norms and conduct lead to an assumption of authority.

In contrast, formal agency involves a clear, often written agreement where the principal explicitly grants authority to the agent. Model agency and constructive agency are less common terms in this context, with constructive agency usually referring to situations where one party is treated as an agent due to a legal obligation rather than mutual consent. Thus, the correct choice highlights the importance of inferred authority based on conduct, aligning with how real-life interactions typically unfold.