Chapter 10 - Agency Flashcards
What is agent and principal?
is the legal relationship between two parties who agree that one party, the agent, will act on behalf of the other party, the principal, subject to the principal’s reasonable direction and control. You work WITH a customer and you work FOR a principal.
What is a subagent?
A person who is authorized to act on behalf of an agent by a principal.
What is a general agent?
A general agent is one who has broad authority to represent his principal in a series of transactions of a continuous nature.
What is a special agent?
is one who acts with limited authority in conducting a specific task for a principal. For example, a real estate broker who is engaged by a property owner to find a buyer or a tenant, and who is not authorized to sell the property or to bind the owner to a sales contract, is a special agent.
What is a customer?
The third party in the agency relationship. The buyer is the customer of the seller’s agent, and the seller is the customer of the buyer’s agent. When the licensee acts as a transaction broker the parties on both sides of the transaction are customers. You work WITH a customer and you work FOR a principal.
What is an employment agreement?
Broker (Principal) and Salesperson (Agent) agency relationship is created between the broker and his salesperson through a written employment agreement
What is a listing contract?
Client (Principal) and Broker (Agent) - although a real estate broker may represent a buyer or seller, or a landlord or tenant, the most common agency agreement is one of two kinds. It is either a written agreement evidenced by the listing contract, in which the property owner lists his property for sale with the broker, or it is the relationship that exists when a buyer seeks the services of a broker to find, and negotiate for her, in the purchase of a particular piece of property (buyer agency contract).
What is puffing?
“Puffing” refers to non-factual or overstated comments that a reasonable person would generally recognize as exaggeration
What is duty of obedience?
Agent must obey, promptly and efficiently, all lawful instructions of the client, even if he disagrees with the client’s judgment.
What is duty of undivided loyalty?
An agent’s loyalty and trust can be rightfully expected by a principal, for any adverse or opposed interests would be contradictory to the agency relationship.
What is duty of disclosure?
An agent must disclose to the principal all relevant and material information concerning the transaction except for information obtained through a previous fiduciary relationship.
What is duty of confidentiality?
The agent must safeguard the principal’s confidences and personal information unless the principal releases the agent from his duty.
What is duty of account?
The agent must keep the principal informed, disclosing all material facts regarding the transaction and maintain accurate records of all monies entrusted to him in accordance with state licensing laws.
What is duty of reasonable care and diligence?
The agent has the duty to use reasonable and diligence in handling the client’s transaction, using the same care as he would if the property were his own or following recognized professional standards existing in the community.
What is a reasonable and diligent inquiry?
Under the Consumer Fraud Act, real estate licensees can be liable for treble damages for repeating to a buyer a misrepresentation made by the seller, even if the licensee had no knowledge the representation was misleading. However, licensees will not be liable for punitive damages or attorney’s fees for repeating a misrepresentation to a buyer if the licensee does not know the statement is false and makes a reasonable and diligent inquiry to determine if the information is false.
