All the following statements concerning general rules of agency law are correct EXCEPT:

• A. There is no presumption that one person acts for another.
• B. There must be some tangible evidence of an agency relationship.
• C. The agency relationship must be created by the principal.
• D. An agent's power to bind the principal may not exceed the authority expressly given by the principal.

Answer: (D)

Understanding agency power starts with how an agent’s authority to bind a principal is determined. An agent doesn’t need express words alone to bind the principal; the law recognizes actual authority—express or implied—and apparent authority created by the principal’s representations. That means the agent can bind the principal even beyond what is explicitly granted if there is implied authority from the agent’s role or if a third party reasonably believes the agent has authority based on the principal’s conduct.

The statement that the agent’s power to bind the principal may not exceed the authority expressly given is not correct. In fact, it may exceed express authority when implied or apparent authority applies, or when the principal later ratifies the act.

The other points fit with general rules: there is no automatic presumption that one person acts for another—you must have some basis to show an agency relationship; there must be evidence of an agency relationship, which can come from conduct, writings, or actions; and typically the agency relationship arises from the principal’s manifestation of consent to the agent to act on the principal’s behalf.