Agency Relationships Flashcards
7 cards from real Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Agency Relationships flashcards as text
A listing agency agreement most commonly terminates when:
Answer: The agreed listing period expires or the transaction closes
A listing agreement typically ends upon expiration of its agreed term, completion of the sale, mutual agreement to cancel, or termination by operation of law.
In agency law, 'ratification' means:
Answer: A principal retroactively approves an unauthorized act performed by the agent
Ratification occurs when a principal accepts or approves an act that the agent performed without prior authorization, making that unauthorized act legally binding on the principal.
When a real estate agent tells a prospective buyer, 'This is absolutely the best neighborhood in the entire city,' without factual support, the agent is engaging in:
Answer: Puffing
Puffing refers to exaggerated, subjective promotional statements that are not considered legally actionable because reasonable buyers understand them as opinions rather than fact.
Vicarious liability holds a real estate broker legally responsible for:
Answer: Wrongful acts committed by the agents the broker supervises
Vicarious liability means a broker can be held legally responsible for their agents' misconduct even if the broker did not participate directly, because of the supervisory relationship.
Agency terminates 'by operation of law' automatically upon:
Answer: The death, bankruptcy, or incapacity of either the principal or the agent
Certain events — death, bankruptcy, or mental incapacity of either party — automatically end the agency relationship by law without requiring formal notice or agreement.
Under an Exclusive Right to Sell listing agreement, the listing broker earns a commission:
Answer: Regardless of who procures the buyer, including the seller themselves
An exclusive right to sell listing guarantees the listing broker a commission no matter who ultimately produces the buyer — the broker, a cooperating agent, or even the seller acting independently.
A seller's agent learns confidential negotiation information from an unrepresented buyer during showings. The agent's correct course of action is to:
Answer: Share the information with the seller to fulfill the fiduciary duty of disclosure and loyalty
A seller's agent owes fiduciary duties of loyalty and disclosure to the seller (their principal), which requires sharing information received from third parties that could benefit the seller in negotiations.