How is "operation of law" defined in agency relationships?

"Operation of law" in agency relationships refers to situations where legal principles or statutes result in the establishment or termination of an agency relationship, independent of the explicit agreement of the parties involved. This concept typically arises when an established law alters the responsibilities or rights of the agents without any need for a direct agreement between them.

In this context, the explanation supports the idea that a change in law can directly impact the property or authority related to the agency, thus modifying the relationship between the principal and the agent. For example, changes in statutory regulations may automatically update the obligations or limitations of agents acting under the scope of their authority. This demonstrates how legal frameworks inherently shape agency dynamics beyond the individual's intentions or written agreements.

Other options fall short as they represent different aspects of agency relationships. A statutory mandate is a broader legal guideline but does not specifically address how agency relationships can change due to law. A voluntary agreement between parties strictly refers to consensual arrangements rather than automatic legal implications. An unrecorded agreement suggests a lack of formal documentation, which does not correlate with the definitions or implications of an agency relationship established purely through legal principles. Thus, the definition aligns most closely with the dynamics involved in option B.