5 Written questions
5 Matching questions
- What is a Universal Agent?
- Are taxes withheld from independent contractors?
- Why is the scope of authority in an agency relationship important? What are the three basic types?
- What is a Dual Agency?
- What is a secret profit, and is it allowed?
- a 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.
- b 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.
- c A universal agent is authorized to do anything that can be lawfully delegated to a representative.
- d Dual agency exists when an agent represents both the buyer and the seller in the same transaction. Dual agency is legal in Washington, although it is discouraged. To act as a dual agent, a broker must have the written consent of both parties to the transac- tion. He must also act impartially towards both buyer and seller and refrain from acting to the detriment of either party.
- e 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.
5 Multiple choice questions
- Under general agency law, a principal is considered to have notice of information that the agent has, even if the agent never actually tells the principal. As a result, a principal could be liable for failing to disclose a problem to a third party, even if the agent never told the principal about the problem. This rule does not apply in Washington State = Principal is NOT automatically liable for things known by his agent.
- NOPE! Agents are meant to be Sherlock Holmes! Alicensee has no duty to investigate any matters that he does not specifically agree to investigate. This includes inspecting the property, investigating either party's financial position, or verifying the seller's statements.
- For listing agreements with this term, a buyer's agent who finds a buyer is STILL a subagent of the seller, rather than agent for the buyer.
- 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.
- Express agreement, ratification, estoppel, implication
5 True/False questions
There aren't any exceptions to the confidentiality rule...uh, right? → 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."
Estoppel (relating to an agency relationship) → Implied agency: one not expressed in words, but understood from actions or circumstances.
Is self-dealing okay? → 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)
Duty 4: Disclosure of material facts → A licensee must disclose any material fact, if the fact is not apparent or readily ascertainable by the party.
Implication agency relationships → Approval/adoption of acts performed outside agency relationship; can be expressed or through accepting the benefit of those acts