Chapter 5 - Professional Liabilty

Question 1

warranty of authority

Answer 1

agent’s promise or guarantee to third parties that their actions fall within the scope of authority given by the principal. an agent acting outside the scope of authority breaches the warranty of authority

Question 2

Fiduciary duties

Answer 2

1. loyalty (confidentiality and full disclosure).
   2.carry out lawful instructions
2. exercise skill and care
3. account for all monies held for the principal

Question 3

fullest disclosure (4 fees)

Answer 3

1. nature of the fee
2. amount of the fee
3. how it is calculated
4. obtain client’s express consent for broker to accept the fee

Question 4

obey lawful instruction

Answer 4

cannot act upon instruction that
1. violates a law; or
2. misrepresentation of the property

Question 5

3 situations agent personally liable to third party

Answer 5

1. fails to disclose they are an agent
2. no authority to act as an agent
3. agent commits a tort