Agency

Question 1

AGENCY BASICS

AGENT is any person employed by a principality represent the principal in business and legal dealings with third parties.

Answer 1

Under the doctrine of IMPUTED KNOWLEDGE , a principal is considered to have the same knowledge or notice of facts known by his agent or sub agent and an agent is considered to have the same knowledge as the sub agent.

If a principal has the same knowledge as his agent, he then would have liability for the agent’s acts. The liability for actions of another is called VICARIOUS LIABILITY.
The agent would be liable also, even though the agent acted on behalf of the principal.

Question 2

3 classifications of agents:

A Universal Agent: has the broadest authority

A General Agent: has the authority to conduct a series of transactions of a continuing nature in a broad but specified range of business matters for his principal. An affiliated licensee is usually a general agent of his employing broker. A property manager is a general agent.

A Special Agent: has limited authority to conduct a single transaction for a principal.

Answer 2

THIRD PARTY in an agency relationship is any person w/ whom the agent deals as a representative of the broker. Usually third parties are called customers.

Question 3

Creating AGENCIES

Agencies my be created by:

Answer 3

1. Express Agreement
2. By Ratification
3. By necessity.
4. By law
5. By estoppel
6. By implication

Question 4

Agency is normally created by an EXPRESS AGREEMENT between the agent and the principal.

Answer 4

This can be oral or written.

Question 5

RATIFICATION is authority given after an act has already been performed.

BY NECESSITY is authority in an emergency.

BY ESTOPPAL. The agency is created when a court stops a principal from denying an agency relationship exists, after the principal has allowed a person to believe an agency relationship did exist.

Answer 5

The following are conditions that result in an ESTOPPEL
1, the principal intentionally or negligently gave a third party the impression that another person was his agent or had certain authority.

2. The third person relied upon the false impression and dealt with the supposed agent ;
3. The third party was damaged by the fact that an actual agency relationship or actual authority did not exist.

Question 6

An agency relationship can be created through IMPLICATION. Accidental dual agent

Answer 6

An agent authority may be Actual or Apparent

Question 7

ACTUAL AUTHORITY is authority either express or implied by the principal.

Express Authority may be given orally or in writing or by ratifying conduct of the principal. Most of the listing agent’s responsibilities are expressed in the listing agreement. It does not give the agent the right to enter into a contract with the seller to convey or execute a deed.

Implied Authority is the authority an agen reasonably needs to perform the duties given by express authority

Answer 7

APPARENT AUTHORITY aka “ostensible authority is the authority created by