Chp. 4 Quiz - Law of Agency

Question 1

In some transactions, a buyer or seller may request that he/she not be officially represented, when this occurs the relationship is said to be?

Answer 1

Non-agency

Question 2

A salesperson sells a house listed by another company for $92,000. The salesperson’s company is to receive 50% of a 7% commission, what is the salesperson’s share of the commission if he received 45% of the amount his company receives?

Answer 2

$1,449

Question 3

To what type of agent does the principal sign a power of attorney?

Answer 3

Universal Agent

Question 4

An exaggerated comment by a licensee about a property’s benefits such as this statement, “This home has the most efficient floor plan of any of the homes in this neighborhood”, is called?

Answer 4

Puffing

Question 5

If Broker Bob lists Seller Sue’s home for sale and then shows the home to Buyer Bill, who is the principal?

Answer 5

Seller Sue

Question 6

What type of agent may not bind the principal to a contract in most cases?

Answer 6

Special Agent

Question 7

If a buyer asks a question about termites and the seller produces a falsified termite report the type of fraud committed would be described as?

Answer 7

Active

Question 8

A property seller empowers an agent to market and sell a property on his behalf. What is this an example of?

Answer 8

Special agency

Question 9

If an agent fails to verify a fact before passing it to the buyer, the agent has committed

Answer 9

Negligent misrepresentation.

Question 10

The principal has all of the following obligations to an agent in an agency relationship except?

Answer 10

Negotiating

Question 11

The statement “Let’s not do business with XYZ Real Estate Company; they discount their commissions”, would probably violate antitrust laws as an example of which of the following?

Answer 11

Boycotting

Question 12

There is a difference between the level of service an agent provides to a client and the level of service he or she provides to a customer, in essence the agent works_____the principal and______ the customer.

Answer 12

for, with

Question 13

If the agent represents the seller, he or she may not disclose certain information without the seller’s express permission, however the agent must always disclose_______________about the property.

Answer 13

material facts

Question 14

When is a commission earned?

Answer 14

When an offer from a qualified buyer has been submitted and accepted and both parties have received signed copies of the agreement.

Question 15

All of the following are types of agency relationships except?

Answer 15

Transactional agency

Question 16

If an agency relationship arises because of the actions of the parties involved rather than by a written agreement, what is that agency called?

Answer 16

Implied agency

Question 17

The _________________________ can enforce compliance with the Sherman Act and some sections of the Clayton Act.

Answer 17

Federal Trade Commission (FTC)

Question 18

The statement “Why don’t you take the south side of town and our company will take the north side”, would probably violate antitrust laws as an example of which of the following?

Answer 18

Market allocating

Question 19

The Criminal Antitrust Penalty Enhancement and Reform Act increased the maximum criminal penalty for individuals to what amount?

Answer 19

$1 million