Unit 4

Question 1

Law of Agency

Answer 1

Agency relationships fall within the body of law called the law of agency.

Question 2

Common Law (Unwritten Law)

Answer 2

Is a law based on usage, general acceptance and custom.

Question 3

Statutory Law

Answer 3

Is written and enacted by legislature.

Question 4

Administrative Law

Answer 4

Is a body of law created by administrative agencies in the form of rules and regulations, orders, and decisions.

Question 5

Agency Relationships in General Business Dealings

Answer 5

Principal- A person who delegates authority to another is called the principal.
Agent- An agent is the person entrusted with another business. An agent is authorized to represent and act for the principal.

Question 6

Fiduciary Relationships

Answer 6

The agency relationship creates a fiduciary relationship with the principal. A fiduciary acts in a position of trust and confidence for another. The fiduciary owes complete allegiance to the principal.

Question 7

Transaction Broker Relationship

Answer 7

A transaction broker is a broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but who does not represent either party in a fiduciary capacity or as a single agent.

Question 8

The seven duties of a transaction broker:

Answer 8

1. Account for all funds.

2. Disclose all known facts that materially affect the value of residential