Agency Law

Special agent

(limited or specific) the principal delegates authority to conduct a specific activity, after which the agency relationship terminates

Which BEST describes the role of a fiduciary?

A fiduciary relationship is established when a property manager agrees to represent an owner in leasing the owner's property.

What is special about a universal agent?

A universal agent has power of attorney.

Which of the following best defines the term procuring cause? Actions that demonstrate the unbroken efforts of an agent that are responsible for the buyer making a decision to complete the sale Being involved at some point in the transaction Scheduling and conducting open house tours Establishing a marketing plan for the listing

Actions that demonstrate the unbroken efforts of an agent that are responsible for the buyer making a decision to complete the sale

Agent Sam told a buyer that the fence line also marked the property line. Agent Sam knew that the property line did not extend to the fence line. Agent Sam's actions are an example of what?

Active fraud

Define implied agency.

An implied agency is formed when the actions of the parties indicate that they have mutually consented to an agency. The persons involved may not have consciously planned to form an agency relationship. However, their actions may unintentionally, inadvertently or accidentally form the relationship.

Which of the following is NOT a form of agency? Express agency Implied agency Closed agency Ostensible agency

Closed agency

The principles of an agency relationship include all of these factors except which one?

Compensation

Which of the following duties is NOT owed to a customer?

Confidentiality

Describe the difference between constructive notice and actual notice.

Constructive notice is the legal presumption that information is available and can be obtained through due diligence. Actual notice means that not only is the information available, but someone has been given the information and actually knows it.

The principal of Notice is sometimes called what?

Disclosure

puffing

Exaggerated or superlative comments or opinions about a properties benefits

Which of the following best defines negligent misrepresentation?

Failure to use ordinary or reasonable care in a situation

Which of the following duties best describes what an agent owes customers? Fairness, care, and honesty Obedience, confidentiality, and accounting Diligence, care, and loyalty Honesty, diligence, and skill

Fairness, care, and honesty

What is a form of implied agency relationship created by the actions of the parties involved rather than by written agreement?

Ostensible agency

A person who hires an agent to represent his or her interests is known as what?

Principal

The act of creating an agency relationship in which the principal accepts the conduct of someone who acted without prior authorization is called what?

Ratification

When a home is listed, what is the minimum which can be created?

Special agency

Puffing is best characterized as which of the following?

Subjective opinion

An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. Which statement best describes what can happen in this case?

The agent has an exposure to a charge of negligent misrepresentation.

Obedience of the agent to the principal means what?

The agent must follow those instructions regardless of personal feelings about them, as long as they do not violate the state or federal laws.

If a transaction doesn't complete, under what circumstances would the broker still be entitled to a commission?

The broker is still entitled to receive the commission if the transaction does not complete due to the seller's default.

eller Joe Needy lists his home for $40,000 and the broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $38,000 and the seller accepts. Which statement is TRUE about this situation?

The broker violated the agency relationship.

Which of the following statements best defines agency?

The fiduciary relationship between the agent and the principal

Which of the following best describes "agency coupled with an interest?"

When a licensee holds interest in a property transaction

Murphy, a buyer (customer), does not know about the leaking basement so he proceeds to make an offer. Should the broker (salesperson) who represents the seller have told Murphy about the defect?

Yes, any defects known to the broker should have been disclosed to Murphy.

estoppal

a legal doctrine by which a person is prevented from asserting rights or facts that are inconsistent with a previous position or representation made by act, conduct or silence

Misrepresenting facts to a buyer might result in:

a voided contract and loss of commission.

An agency coupled with an interest

an agency relationship in which the agent has an interest in the property that is being sold. cannot be revoked by the principal nor terminated if the principal dies

A contract in which an owner hires a broker to market the property creates an agency relationship between:

broker and seller.

An agency relationship:

can occur thru implication (what you might say or do) without a written contract.

self-dealing

intentional misrepresentation. Occurs when a broker lists the property, decides to buy it for him or herself and then collects the agreed-upon commission.

caveat emptor

let the buyer beware

express agency

most common way of creating an agency relationship by a written agreement

Agent Mary forgot to complete a sales contract rider. This resulted in a $300 loss for her client. Agent Mary's actions can be described as:

negligent.

An agent is:

one who represents and acts for another.

Agent Fred fronts his cousin Norm money to buy a client's house. Shortly after the closing, Agent Fred flips the house and realizes a substantial profit. Agent Fred's actions might be describe as:

self-dealing.

In most instances, real estate brokerage is based on what type of agency?

special agency

what is ratification

the adoption or confirmation of an act already performed on behalf of a person without prior's authorization

General agent

the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise

Universal Agent

the principal empowers the agent to perform any and all actions that may be legally delegated to an agency representative.

How is implied agency formed?

when the actions of the parties indicate that they have mutually consented to an agency