5 Written questions
5 Matching questions
- What is Vicarious liability and why does it matter in principal/agent relationships?
- What is the duty in an agency relationship?
- What is a material fact?
- Does it matter when the agency disclosure happens?
- Estoppel (relating to an agency relationship)
- a Under general agency law, the principal may be held liable for his agent's wrongful acts. This is known as vicarious liability. Thus, a buyer or seller may be liable for the acts of his broker or a salesperson working for that broker.
- b Fiduciary! Agent stands in special position of trust and confidence for someone else.
- c IN WRITING AND BEFORE!!! The agency disclosures must be made to the buyer before the buyer signs the offer, and to the seller before the seller signs the offer. The disclosure must be in writing, either in a separate paragraph in the purchase and sale agreement or in a separate disclosure document.
- d 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)
- e Principal allowed third party to believe agency relationship existed; unfair to not allow
5 Multiple choice questions
- Real estate brokers are virtually always independent contractors in relation to their principals. And most real estate salespersons and associate brokers are independent contractors in relation to their brokers, although in rare instances they're classified as employees.
- 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.
- YOU'RE FIRED!!! The principal may revoke the agency by firing the agent whenever she wishes. The principal may be liable for any damages caused by the breach.
- Important employment and tax laws apply when someone is classified as an employee, particularly those involving the withholding of income taxes and social security. Unlike employees, independent contractors do not have taxes withheld from their earnings.
- KEEP SECRETS!!! The agent must place the principal's interests above the interests of a third party by refusing to reveal confidential information. The duty not to disclose confidential information continues even after the agency relationship has ended; thus, a broker could not tell subsequent clients information about a past client obtained while representing that past client.
5 True/False questions
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!!!
What is an inadvertent dual agency? → A universal agent is authorized to do anything that can be lawfully delegated to a representative.
Duty 2: Conflicts of interest → 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.)
There aren't any exceptions to the confidentiality rule...uh, right? → 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.
Duty 1: Loyalty → KEEP SECRETS!!! The agent must place the principal's interests above the interests of a third party by refusing to reveal confidential information. The duty not to disclose confidential information continues even after the agency relationship has ended; thus, a broker could not tell subsequent clients information about a past client obtained while representing that past client.