True or False: Oral contracts may always be used to establish agency relationships.

Oral contracts can sometimes establish agency relationships, but they are not always sufficient or advisable for this purpose. The correct understanding is that while an oral contract can indicate the intention to form an agency relationship, certain circumstances, particularly those involving real estate, require written agreements to be enforceable under the law.

In many jurisdictions, especially in real estate transactions, a written agreement is often necessary to comply with statutes of frauds that mandate certain contracts, including those regarding the transfer of property, to be in writing. Without a written contract, there may be ambiguity regarding the terms of the agency or the responsibilities of the agent and the principal, leading to potential disputes.

Thus, although oral contracts can establish agency relationships, their enforceability and clarity can be significantly limited, making them unreliable in many situations. This highlights why saying that oral contracts "may always" be used is not accurate; they are subject to legal requirements and practical concerns.