Morgan's (V-C, D, E) Flashcards
The term for the position of trust marks an agent/principal relationship; the principal trusts the agent to ‘do right’
Fiduciary
To steadfastly work for, never against, the best interests of the principal while applying expected, reasonable care, skill, and diligence in the performance of all transaction-related matters
Loyalty (or allegiance)
To adhere to the principal’s instructions but DOES NOT include illegal actions
Obedience
To give a fair and accurate accounting of all funds that are transaction-related even if that means after the transaction is over and the agency relationship has been terminated
Accounting
To disclose all pertinent information to the principal
Disclosure
To keep confidential all information that might weaken the principal’s interests, such as lowest acceptable price or unusual/extenuating circumstances
Confidence
What are the important caveats to the principal of confidentiality?
- You may reveal confidential information with the principal’s permission ONLY
- Confidentiality does NOT apply to illegal information
- Confidentiality outlives the termination of the relationship
What are the 5 fiduciary responsibilities?
COLAD
Confidentiality Obedience Loyalty Accounting Disclosure
Which responsibilities outlast the termination of agency?
Confidentiality and accounting
What 2 situations must be avoided by an agent with respect to accounting?
- Commingling
2. Conversion
___ means mingling (or combining) transaction funds with other funds that are required to be maintained separately.
Commingling
___ refers to converting funds to another use than the one intended by the principal, or misappropriating them.
Conversion
Any general exaggeration found in promotional materials or agent comments intended to creat a stronger impression of a property
Puffering (or puffing)
Any variety of misleading statements or undisclosed facts that an agent reasonably should have known and disclosed
Misrepresentation
Type of misrepresentation - making a careless statement where the exercise of due diligence and professional standards of care would have made the correct facts known
Negligent misrepresentation
Type of misrepresentation - making a false statement (or failing to make a known material disclosure) that is likely to induce a reasonable party to act against that party’s own best interest
Material misrepresentation
Intentional misrepresentation designed to persuade a party to make a decision the party would not have made had full and accurate disclosure been made
Fraud
Legally “automatic” mechanisms such as when a contract is terminated upon the discovery of the lack of one or more necessary elements, as when a party does not actually have legal authority to enter into a contract in the first place
Operation of law
List common occurrences that terminate contrast based on the operation of law.
- Completion of the transaction through performance (or fulfillment) of contract elements
- Expiration of the agency period
- Lack of legal elements in the original contract
List acts of parties that can serve to terminate a contract.
- Mutual agreement of the parties
- Revocation of contract by the principal
- Renunciation (or abandonment) by the agent
- Breach of contract
In addition to the other factors previously listed, list reasons for terminating a listing agreement.
- Bankruptcy of either party
- Loss of title by seller (through tax sale, foreclosure, etc.)
- Condemnation (through eminent domain)
- Destruction of the property
- Death or incapacity of one of the parties
- Revocation of agreement by the principal
- Renunciation of the agreement or abandonment of agency services of the agent
