Law of Agency 3

Question 1

Procuring Cause of Sale

Answer 1

The individual who through a series of uninterrupted activities, brought about the completion of a contract

Question 2

Sherman Anti-Trust Act

Answer 2

Federal legislation that specially deals with illegal fixing of commission rates

Question 3

Price Fixing

Answer 3

Setting commission rates between groups of brokers in an area

Question 4

Honest dealing

Answer 4

An agent may not deceive or defraud a customer

Question 5

Reasonable care

Answer 5

The agent is held to the standards of knowledge, expertise and ethics defined by TRELA

Question 6

The agreement that buyers sign, allowing a broker to represent them is called a…

Answer 6

Buyer/Tenant Rep Agreement

Question 7

Who may earn a commission and also sue to collect a commission?

Answer 7

Broker

Question 8

What must a broker due to enforce payment of a commission?

Answer 8

1) Have valid real estate license
2) Signed employment agreement
3) Must be procuring cause of sale

Question 9

Who is the procuring cause of sale?

Answer 9

Individual who through uninterrupted activities, brought about completion of a contract.

Question 10

(True/False) The courts consider a broker’s oral listing agreement with a client as enforceable against the client.

Answer 10

False

Question 11

(True/False) Commission rates are not negotiable between parties

Answer 11

False

Question 12

Which federal law(s) has the greatest impact in the area of illegal price-fixing of commissions?

Answer 12

1) The Clayton Act

2) Sherman Anti-Trust Act

Question 13

(True/False) TREC sets commission rate between broker and the broker’s client

Answer 13

False

Question 14

What actions by a broker are violations of federal law?

Answer 14

• price fixing
• limiting competition by assigning market areas
• boycotting discount brokers

Question 15

(True/False) Negotiating commission rates with clients are a violation of federal law

Answer 15

False