Chapter 11 - Agency Flashcards
20 Questions
The essence of the agency relationship between an agent and a principal can best be described as a relationship of
a. mutual consent, consideration, and acceptance.
b. diligence, results, and compensation.
c. service, dignity, and respect.
d. trust, confidence, and good faith.
d. trust, confidence, and good faith.
In an agency relationship, the principal is required to
a. promote the agent’s best interests.
b. accept the advice of the agent.
c. provide sufficient information for the agent to complete the agent’s tasks.
d. maintain confidentiality.
c. provide sufficient information for the agent to complete the agent’s tasks.
A principal empowers an agent to conduct the ongoing activities of one of her business enterprises. This is an example of
a. limited agency.
b. general agency.
c. universal agency.
d. special agency.
b. general agency.
A property seller empowers an agent to market and sell a property on his behalf. This is an example of
a. general agency.
b. special agency.
c. universal agency.
d. no agency.
b. special agency.
Implied agency arises when
a. an agent accepts an oral listing.
b. a principal accepts an oral listing.
c. a party creates an agency relationship outside of an express agreement.
d. a principal agrees to all terms of a written listing agreement, whether express or implied.
c. a party creates an agency relationship outside of an express agreement.
An agency relationship may be involuntarily terminated for which of the following reasons?
a. Death or incapacity of the agent
b. Mutual consent
c. Full performance
d. Renewal of the agent’s license
a. Death or incapacity of the agent
A principal discloses that she would sell a property for $150,000. During the listing period, the house is marketed for $180,000. No offers come in, and the listing expires. Two weeks later, the agent grumbles to a customer that the seller would have sold for less than the listed price. Which of the following is true?
a. The agent has violated the duty of confidentiality.
b. The agent has fulfilled all fiduciary duties, including confidentiality, since the listing had expired.
c. The agent is violating the duties owed this customer.
d. The agent has created a dual agency situation with the customer.
a. The agent has violated the duty of confidentiality.
A principal instructs an agent to market a property only to families on the north side of town. The agent refuses to comply. In this case,
a. the agent has violated fiduciary duty.
b. the agent has not violated fiduciary duty.
c. the agent is liable for breaching the listing terms.
d. the agent should obey the instruction to salvage the listing.
b. the agent has not violated fiduciary duty.
An owner’s agent is showing a buyer an apartment building. The buyer notices water stains on the ceiling, and informs the agent. The agent’s best course of action is to
a. immediately contract to paint the ceiling.
b. immediately contract to repair the roof.
c. suggest the buyer make a lower-price offer.
d. inform the seller.
d. inform the seller.
An agent owes customers several duties. These may be best described as
a. fairness, care, and honesty.
b. obedience, confidentiality, and accounting.
c. diligence, care, and loyalty.
d. honesty, diligence, and skill.
a. fairness, care, and honesty.
An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. In this case, the agent
a. may be guilty of intentional misrepresentation.
b. has an exposure to a charge of negligent misrepresentation.
c. has little exposure, since the problem was not mentioned on the signed disclosure form.
d. is not vulnerable, since the problem was not discovered.
b. has an exposure to a charge of negligent misrepresentation.
An agent informs a buyer that a clause in a contract is standard language. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for
a. violating duties owed a customer.
b. misinterpreting the clause.
c. intentional misrepresentation.
d. practicing law without a license.
d. practicing law without a license.
An outside broker locates a seller for a buyer representative’s client. In this instance, the outside broker is acting as
a. a single agent.
b. a dual agent.
c. a subagent.
d. a secret agent.
c. a subagent
Agent Bob, who works for Broker Bill, obtains an owner listing to lease a building. Bill’s other agent, Sue, locates a tenant for Bob’s listing. In the absence of any arrangement to the contrary, Broker Bill in this instance is
a. an implied agent.
b. a transaction broker.
c. a single agent.
d. a subagent.
b. a transaction broker.
An agent is operating as a transaction broker on a transaction. In this case, the agent
a. may not represent one party’s interests to the detriment of the other.
b. must withdraw from the relationships.
c. must be obedient and loyal to both parties.
d. must require that the principals share equally in paying the commission.
a. may not represent one party’s interests to the detriment of the other.
