Ch 5 : Unit 1 - Agency Law Quiz

The Criminal Antitrust Penalty Enhancement and Reform Act increased the maximum criminal penalty for individuals to what amount?

$350,000 $1 million $2 million $10 million

Matt Bower is a developer. Will Jones is a builder. Matt agrees to sell Will a lot, but he conditions the sale by insisting that Will agree to list the property with him after the home is built. What is this called?

Tie-in arrangement

An agent's duties to a principal include all of the following except which?

Legal advice

An agent's duties to a principal include all of the following except which? Loyalty Accounting Notice Legal advice

Legal advice

An agency relationship is created in each of the following situations EXCEPT which?

A broker shows a tenant an apartment.

"Let's not do business with AVC Real Estate Company; they discount their commissions" is an example of what? Price fixing Boycott Market allocation Tying agreement

Boycott

Which of the following is NOT a form of 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

Which of the following duties is NOT owed to a customer? Confidentiality Honesty Reasonable care and skill Proper disclosure

Confidentiality

Which of the following does a principal owe to his or her licensee? Information Access Accounting Performance

Information

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.

An agency relationship can occur through implication (what you might say or do) without a written contract always require a written contract is always derived by express act is better accomplished through implication or ratification

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

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.

Which BEST describes the role of a fiduciary? A broker can only accept a reasonable amount of profit over the agreed upon consideration. A fiduciary relationship is established when a property manager agrees to represent an owner in leasing the owner's property. A fiduciary can only disclose confidential information obtained after termination of fiduciary relationship. A fiduciary relationship is always created when a broker shows a buyer a house.

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

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

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? Passive fraud Unintended fraud Active fraud Puffing

Active fraud

What are the three primary areas of disclosure? Limits, conditions, and funding Relationships, performance history, investment value Agency, property condition, and environmental hazards Fiduciary, accounting, and feedback

Agency, property condition, and environmental hazards

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

Which of the following is a common complaint buyers have against brokers?

Misrepresentation of the facts

Which of the following is a common complaint buyers have against brokers? Excessive paper work Compensation fees Misrepresentation of the facts Failure to respond to questions

Misrepresentation of the facts

Which duty requires that the agent act in good faith and obey the principal's directions?

Obedience

"Everyone charges the same so you might as well list with me" is an example of what? Price fixing Boycott Market allocation Tying agreement

Price fixing

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

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

Which of these is not a violation of Sherman Antitrust laws? Boycott Price Fixing Redlining Market allocation

Redlining

When a home is listed, what is the most limited agency that can be created? Agency coupled with an interest General agency Special agency Universal agency

Special agency

Puffing is best characterized as which of the following

Subjective opinion

After listing a home with a broker, the seller told the broker NOT to disclose a major structural defect in the house. What should the broker do? Refrain from telling prospective buyers because of the fiduciary responsibility to the seller. Refrain from telling the prospective buyers because that is the brokers responsibility to the seller. Tell the buyer only if he asks about it. Tell the buyer of the defect prior to the writing of an offer or refuse the listing.

Tell the buyer of the defect prior to the writing of an offer or refuse the listing.

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.

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 may be guilty of intentional misrepresentation. The agent has an exposure to a charge of negligent misrepresentation. The agent has little exposure, since the problem was not mentioned on the signed disclosure form. The agent is not vulnerable, since the problem was not discovered.

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

Seller 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.

The principal of Notice is sometimes called what?

disclosure

Paul Shafer is acting as the agent of David Smith. He can agree to a change in price without Smith's approval. may share his commission with a licensed attorney. must report all offers to Smith. can make a profit in addition to his commission.

must report all offers to Smith.

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.