5 Written questions
5 Matching questions
- Duty 1: Reasonable care and skill
- Agent's duties in general?
- What are the legal effects of agency?
- Duty 5: Accounting for Trust Funds
- Duty 6: Providing an agency law pamphlet
- a The principal is bound by acts of the agent that are within the scope of the agent's authority.
- b In addition to owing fiduciary duties to her principal, an agent owes certain duties to any party to whom he renders services. This applies whether it is a principal or a third party.
- c If an agent's negligence or in- competence harms a third party, the agent may be liable
- d Licensee must watch the money closely!!!! A licensee must account for any trust funds: money or valuable items received on behalf of a party to a transaction. The licensee must report to the party on the status of the trust funds and avoid commingling (mixing) them with her own money. The duty of accounting continues after the termination of the agency.
- e The client even gets some documents proving the agency relationship!!! A licensee must give an agency law pamphlet to each party she provides services to. The pamphlet sets forth provisions of Washington's agency law. The pamphlet must be given to parties before any written agreement is signed.
5 Multiple choice questions
- When in doubt, disclose it out!!! A licensee must disclose any potential conflicts of interest to the principal, such as any relationship between the agent and a prospective buyer. (For instance, if the buyer is a friend, relative, or business associate of the agent.)
- The extent to which the principal can be bound by the agent's actions depends on the scope of authority granted to the agent; Types: Universal, general, special.
- ABSOLUTELY NOT!!! NO KICKBACKS!!! An agent must not make any secret profits off the agency. A secret profit is a financial benefit that the agent receives without the principal's consent, such as a kickback from referring the principal's business to a contractor. An agent may still use the services of a contractor with whom she has an interest, so long as the interest is disclosed and the principal consents.
- information that has a substantial negative effect on the value of the property or on a party's ability to perform his or her contractual duties, or that defeats the purpose of the transaction. RULE OF THUMB: Anything that might make it difficult for the parties to complete the transaction (such as the bankruptcy of one of the parties) should be disclosed. (Sex offender presence does not need to be disclosed)
- An independent contractor is hired to perform a particular job, and uses her own judgment to decide how the job should be completed. In contrast, an employee is hired to perform whatever tasks the employer requires, and is given instructions on how to accomplish each task.
5 True/False questions
How are Actual and Apparent authority different? → Think of this as Washington's requirement that ALL the cards be put on the table: Washington law requires real estate agents in residential transactions to make agency disclosures to both the buyer and seller informing them which party (or parties) they represent.
So, the agent wants to give the pamphlet to the party he is providing services to...he decides to do this after they've signed a written agreement. That's cool, right? → WRONG WRONG WRONG! The Pamphlet must be given out before ANY written agreement is signed!!!
Is the broker responsible for the salesperson's conduct, even if he or she is an independent contractor? → In addition to the general duties that licensees owe to any party to whom they render services, there are specific duties that licensees owe to the parties they represent. If the agent represents the seller, these duties are owed only to the seller. If the agent represents the buyer, these duties are owed only to the buyer. If the agent is a dual agent, these duties are owed to both buyer and seller.
Estoppel (relating to an agency relationship) → Principal allowed third party to believe agency relationship existed; unfair to not allow
Mutual agreement to terminate → Most agencies are created by an express written agreement, such as a listing agreement or a buyer agency agreement. However, the agreement does not need to be in writing to create a valid agency, nor does the agreement have to be supported by consideration.