5 Written questions
5 Matching questions
- What are the legal effects of agency?
- 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?
- Duty 2: Conflicts of interest
- There aren't any exceptions to the confidentiality rule...uh, right?
- Duty 3: Present ALL written communications
- a WRONG! Think court order, and latent defects -- Confidential information may be disclosed under court order or subpoena. In addition, latent defects should always be disclosed, even if a principal considers them to be "confidential."
- b WRONG WRONG WRONG! The Pamphlet must be given out before ANY written agreement is signed!!!
- c A licensee is obligated to present all types of written communications, including all written offers, to and from either party in a timely manner. Offers and counteroffers must be presented regardless of how unacceptable they may appear. The party, not the licensee, will decide whether or not to accept a particular offer. The licensee should present offers even if the property is subject to an existing contract (although not if the listing has expired).
- d 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.)
- e The principal is bound by acts of the agent that are within the scope of the agent's authority.
5 Multiple choice questions
- WATCH OUT LISTING AGENT! Don't get too buddy-buddy with the buyer. Many dual agency lawsuits involve unintended dual agency, in which the seller's agent's conduct with the buyer created an agency by implication be- tween the agent and buyer.
- Relationship doesn't last forever -- An agency relationship will terminate automatically if (1) the term of the agency expires; (2) the purpose of the agency is fulfilled (property sold); (3) either the principal or agent dies, is declared incompetent, or declares bankruptcy; or (4) the property is destroyed (e.g., burns down).
- Agent - authorized rep; Principal - controller of agent's acts; People outside the relationship are third parties. Principal who engages agent's services is the "client", but a mere third party is a "customer."
- Don't quit!!! Licensees must make a good faith and continuous effort to fulfill the terms of the agency agreement. For instance, a seller's agent must make a good faith and continuous effort to find a buyer for the property.
- 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.
5 True/False questions
Duty 4: Disclosure of material facts → 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.)
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.
Ratification of agency relationship → Implied agency: one not expressed in words, but understood from actions or circumstances.
Duty 3: Confidentiality → An agent must always place the principal's interests above the interests of a third party. For instance, a seller's agent must negotiate with the buyer to get the highest price possible for the seller.
What are the agent's duties to the principal? → 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.