Law of Agency 1 Flashcards
Procuring Cause of Sale
The effort that results in the sale of property - the act of bringing a ready, willing and able buyer to a seller resulting the sale of the seller’s property.
Duties of a Principal
A principal owes his agent compensation, reimbursement, indemnification and performance
Sherman Anti-Trust Act
Federal law that preserves business competition by prohibiting monopolies, monopolistic practices and restraint of trade - in real estate the biggest impact is on commissions - always negotiable
Appointed Associate
A licensee appointed by a broker in Texas in an intermediary situation to work with either the buyer or the seller in the transaction.
Exclusive Agency Listing
A listing where one broker is the exclusive agent and will earn a commission if the property is sold, unless the seller sells it himself - the seller is competing with his broker.
Special Agency / Limited Agency
A principal gives an agent the power to perform specific acts, but not to bind the principal
Commission
A negotiated compensation in a broker’s employment contract
Open Listing
A listing where a seller reserves the right to list with as many brokers as he chooses - he also reserves the right to sell the property himself - only a broker who brings a contract to the seller will earn a commission
Subagent
An agent for a person who is already an agent for a principle - the listing salesperson under a listing broker - this is not a Texas definition
Blind Ad
An advertisement that does not clearly indicate the licensed status of the party placing the ad - real estate licensees are prohibited from placing blind ads
Agency coupled with an interest
Any transaction where the agent is also the seller, or the agent is also the buyer - this dual role must always be disclosed
Broker
A properly licensed party who serves a principal in an agency relationship - also called an agent
Oral Agency
An agency relationship created by an oral or spoken agreement
Agency
The fiduciary relationship between a broker and a principal or a broker and a client
Buyer Representation Agreement
An employment contract obligating a broker to act as a fiduciary to a buyer
Implied Agency
Agency as a result of customary, usual or typical conditions
Fiduciary Responsibilities
The responsibilities a broker has to clients in an agency relationship; includes placing the interest of the client first, full disclosure of all facts, material and other, and giving advice and opinions
Duties of an agent
An agent owes his client obedience, loyalty, disclosure, confidentiality, accounting and reasonable care (old car)
Intermediary
A broker in Texas who has the written permission of both the buyer and the seller to represent both parties in a single transaction.
Dual Agent
A broker who has the written permission of both the buyer and the seller to represent both parties in a single transaction
Exclusive Right to Sell
A listing where one broker will earn a commission when the property is sold, no matter who sells it
General Agency
A principal gives an agent the power to bind him in a particular trade or business
Designated Agent
A licenses appointed by a broker in a dual agency situation to work with either the buyer or the seller in the transaction
Principal / Client
A party represented by a broker in an agency relationship
Universal Agency
A principal gives an agent the power to transact matters of all types for him
Fiduciary
A party acting for another in a position of trust - a broker, an agent
Agency by Ratification
Agency established when an agent acts without permission of the principal and the principal accepts or rectifies those actions
Agency by Estoppel
A principal fails to maintain due diligence over his agent and as a result the court prevents the principal from denying the agency relationship
Public Responsibilities
The responsibilities a broker has to customers or third parties including honesty, fairness and disclosure of material facts.
Management Agreement
An employment contract obligating a broker to act as a fiduciary to a property owner
Fiduciary Relationship
The relationship based on trust - the relationship governed by the law of agency between a broker and a principal
Listing Agreement
An employment contract obligating a broker to act as a fiduciary to a seller
Ostensible Agency
Agency as a result of the actions of an agent and the response of others to those actions
Customer
A third party - one a broker is working with, but who is not represented by that broker
Oral Agency
An agency relationship created by an oral or spoken agreement
Implied Agency
Agency as a result of customary,usual, or typical conditions
Fiduciary Responsibilities
Responsibility broker has to clients in an agency relationship.
Placing interest of client first
Full disclosure of all facts and materials
Giving advice and opinions
Duties of an Agent
Agent owes client:
O-bedience
L-oyalty
D-isclosure
C-onfidentiality
A-ccounting
R-easonable Care
Intermediary
Broker in Texas who has written permission of buyer and seller to rep both parties in a single transaction
Limited Agency
Principle gives agent power to perform specific acts but not to bind the principle
Also called special agency
