Chapter 12 Random Flashcards
Adel is a trading services licensee acting for a developer who is purchasing large blocks of land in Vancouver for a large development. Adel purchases some lots in the area for himself and discloses his identity to the sellers as required by the Real Estate Services Act on those purchases. He does not mention the purchases to his principal, the developer. Shortly thereafter, Adel makes a profit on the resale of his lots due to the effects of his principal’s development on the real estate market. What is this an example of?
(1) a good business deal which is perfectly acceptable at law
(2) a use of information that will always, even with disclosure to the principal, be prohibited
(3) a profit for which Adel must account to his principal
(4) Adel’s activities are examples of both (2) and (3)
3
If, under a principal’s instructions, an agent makes certain representations concerning a property which are false to the knowledge of both the principal and the agent:
(1) the principal is liable because he or she explicitly authorized the tort.
(2) the agent cannot escape personal liability by arguing that he or she was authorized to commit the tort.
(3) the agent will be personally liable for the tort.
(4) All of the above will be applicable.
4
Usually, a licensee’s commission will be paid:
(1) when a ready, willing and able buyer is presented to the seller.
(2) when a deposit has been paid by the buyer.
(3) when the contract of purchase and sale is signed by both parties.
(4) when the transaction has been completed and title is transferred.
4
Which of the following statements is FALSE under the common law of agency?
(1) An agency relationship is created when two persons agree that one will act on behalf of the other.
(2) Where the agent does not disclose that she is an agent and enters into a contract with a third party, the principal can have no liability for the contract.
(3) An agent who would not have capacity to enter a contract herself may be able to make a valid contract on her principal’s behalf.
(4) An agency agreement may be either written or oral or partly written and partly oral.
2
A person whom an agent represents is known in law as the:
(1) buyer.
(2) principal.
(3) client.
(4) seller.
2
Where a licensee has complied strictly with the disclosure requirements of the Real Estate Services Act when purchasing property:
(1) no conflict of interest and duty could exist.
(2) the common law may still require further disclosure.
(3) he or she may make a secret profit.
(4) none of the above will be applicable.
2
Where a representative has misconducted him or herself and a member of the public has accordingly suffered damages:
(1) both the representative and the brokerage may be investigated by the Real Estate Council.
(2) only the representative may be sued in a civil action.
(3) only the representative may be charged with a breach of the Real Estate Services Act.
(4) the representative’s licence may be cancelled but the brokerage’s licence may only be suspended.
1
Which of the following events will terminate an agency relationship?
(1) revocation of the agency by the principal
(2) frustration
(3) performance
(4) all of the above
4
An agent owes a duty to the principal not to make a secret profit. This means that an agent must keep the principal fully informed about:
(1) all of the agent’s personal business dealings.
(2) the agent’s annual tax return.
(3) all of the actual benefits and prospective benefits accruing to the agent in a transaction.
(4) only the actual profits received by the agent.
3
You, as a trading services licensee working in a “hot” market, have recently listed a property for sale at
$850,000. An offer of $840,000 was received at 8:30 this morning . At noon, a second offer of $845,000 was received and a third offer of $850,000 at 2:30 in the afternoon. You will be seeing the seller at 7:00 this evening. Which offer is to be presented?
(1) all of the offers
(2) the offer of $840,000
(3) the offer of $845,000
(4) the offer of $850,000
1
Assume that a seller instructs his real estate licensee to make certain oral representations regarding a property which both the seller and the licensee know to be false. If the purchaser later sues the seller and the licensee on the basis of this misrepresentation, then:
(1) the seller will be liable to the buyer because he explicitly authorized the tort.
(2) the licensee can escape personal liability by arguing that he was authorized to commit the tort.
(3) the seller and the licensee will not be liable if there is a clause in the contract of purchase and sale reading, “There are no representations, warranties, guarantees, promises, or collateral agreements other than those contained in this written agreement”.
(4) the buyer’s only remedy will be a court order against the seller for damages.
1
Steve-Ann, a trading services licensee, has been asked by her friend Jean to find a house and, if successful, Jean has agreed to pay Steve-Ann the sum of $3,000, over and above any commission that Steve-Ann would earn on the sale of the property. When Steve-Ann finds a house acceptable to Jean, Steve-Ann shares the commission with the other licensees involved and receives $3,000 directly from Jean. Steve-Ann does not tell anyone of this $3,000 payment.
Which of the following statements are TRUE?
(1) Steve-Ann has breached the provisions of the Real Estate Services Act.
(2) Steve-Ann has breached the common law principles of agency law.
(3) Both (1) and (2) are true.
(4) Neither (1) nor (2) is true.
1
A trading services representative must never promise to buy or sell any real estate belonging to a prospective buyer:
(1) unless at the time of making the promise, a signed statement setting forth the details of the promise is given to the person to whom the promise has been made.
(2) unless at the time of making the promise, the representative has in fact lined up a buyer for the property.
(3) unless the representative has been authorized by the brokerage to make such a promise.
(4) because such promises are expressly forbidden under the Real Estate Services Act.
1
An agency contract can be terminated in one or more of the following ways:
A. by the death of one of the parties
B. by the legal doctrine of frustration
C. by a letter of termination by the principal
D. by the insanity of the agent or the principal Which of the statements are TRUE?
(1) A, B and D are true.
(2) D, C and A are true.
(3) A, B and C are true.
(4) All of the above are true.
4
When a real estate agency relationship is created:
(1) the interests of the agent take priority over those of the principal.
(2) the buyer of the property is always owed the agent’s primary duty to act solely for his or her benefit.
(3) the “agent” is an employee and works under the direct control and supervision of his or her principal.
(4) None of the above are true.
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