RP UNIT9 Flashcards
What is common law?
Rules of society established by tradition and court decisions
What is statutory law?
Enacted by legislatures
What is administrative law?
Rules and regulations created by real estate commissions and departments, as authorized by the legislature
Define ‘Agent’ in the law of agency.
The individual who is authorized and consents to represent the interests of another person in dealings with a third person
Who is the Principal in a real estate transaction?
The individual who hires and delegates to the agent the responsibility of representing the principal’s interests
What is the definition of Agency?
The fiduciary relationship between the principal and the agent
Define ‘Fiduciary’.
The relationship in which the agent is held in a position of special trust and confidence by the principal
Who is considered a Client in real estate?
The principal in a real estate transaction for whom the broker acts as agent
What is a Customer in the context of real estate?
The third party or nonrepresented consumer for whom some level of service is provided and who is entitled to fairness and honesty
What is a Nonagent?
An individual who assists one or both parties to a transaction without representing either party’s interests
What are common law duties in an agency usually incorporated within?
Statutory law
What must the relationship between principal and agent be?
Consensual
What is Express Agency?
The parties state the terms of the agreement and express their intentions either orally or in writing
What is Implied Agency?
Actions of the parties indicate they have mutually consented to an agency
Fill in the blank: A _______ agency exists when no fee is involved, and still will impose agency obligations on the agent.
gratuitous
What is the minimum number of common law duties in a fiduciary relationship?
Six duties (COLD-AC)
What does ‘Care’ entail in common law duties?
Agent must exercise reasonable degree of care; liability can result from negligence or carelessness
What does ‘Obedience’ require of an agent?
Agent must act in good faith and according to the principal’s instructions
Define ‘Loyalty’ in the context of an agency.
Principal’s interests must come before the agent’s; 100 percent loyalty is required
What must an agent disclose to the principal?
All facts, including offers, identity of prospective buyers, and agent’s interest
What is Accounting in fiduciary responsibilities?
Agent must account for all pertinent funds and documents placed in the agent’s care
What is Confidentiality in the context of agency?
Agent must keep information about the principal’s personal affairs confidential
What is a Universal Agent?
An agent with no limits on authority; not typical for a real estate licensee
Define General Agent.
One who represents the principal in a range of matters related to a particular business or activity
