Ch. 9 Exam Questions Flashcards Preview

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Flashcards in Ch. 9 Exam Questions Deck (19)
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1
Q

A principle can be held liable for the actions of his or her agent while the agent is acting within the scope granted in the agency agreement. This is known as the principle of:

A

Vicarious liability;

In the case of an agency relationship, the principal can only be liable for the act of the agent that were within either the actual expressed scope of the authority granted by the principal apparent or ostensible authority (that which is not in writing but is necessary to the performance of the expressed authority). The principle is not liable for the acts of the agent that are outside the scope and authority of the agency relationship.

2
Q

The party granting authority for another to act on his or her behalf is known as the: principal

A

Principle;

The principal grants authority to the agent.

3
Q

Agency relationships can be created by all of the following, except:

A

By verification.

Verification has no significance in creating agency relationships.

4
Q

A person representing another’s interest without expectation of compensation is known as:

A

A gratuitous agent;

A gratuitous agent is one who acts as an agent for another without compensation

5
Q

A real estate sales person acting as a buyers agent:

A

Is an agent of his/her broker and a sub agent to the buyer.

A sales person is the agent of the broker and a self agent of the client, whether buyer or seller.

6
Q

Which of the following can terminate an agency relationship?

A

Death of the principal or agent, performance, and unilateral action by the principal or the agent.

7
Q

The parties to an agency relationship are the:

A

Principal and agent.

8
Q

A dual agent must:

A

Disclose the dual agency in writing and obtain the written consent of all parties to the transaction to the dual agency relationship;

Nevada requires that an agency disclosure form be given to a buyer or seller as soon as practicable and at the time a contract is entered into, the parties must sign an agency confirmation statement acknowledging agreement to the declared agency relationships in the transaction. This statement is included in the deposit receipt.

9
Q

An agency relationship created when a party gives approval to unauthorized actions after the fact is known as:

A

Agency by ratification;

An agency by ratification occurs when the principal gives approval after the fact to a person who is without authority to act for the principal or to an agent whose actions have exceeded the scope of authority given in the agency agreement.

10
Q

A listing agent becomes a dual agent if:

A

None of the above (The listing agent advises the buyer of the latent defect in sellers property, the listing agent present the offer of a buyer represented by another licensee to the seller, and the listing agent offers a part of the commission agreed to in the listing agreement to the buyers agent.)

Dual agency is created when both the buyer and seller or two buyers negotiating for the same property are represented by the same broker.

11
Q

A real estate sales person owes legal duties to:

A

Third parties, the principal, and his or her broker.

12
Q

A person holding a position of trust is known as:

A

A fiduciary;

A fiduciary is a person holding a position of trust, with said position in posing a number of legal duties.

13
Q

A person authorized to act for another under a properly executed power of attorney is known as:

A

An attorney in fact;

When signing for another under a properly executed power of attorney, the person signing will sign the name of the person granting the power of attorney, and sign their name as attorney in fact.

14
Q

The highest level of fiduciary duties a real estate agent owes are those to:

A

The principal;

While duties are owed to all parties in a transaction and to both parties when represented by the same agent, only in a single agency principle/agent relationship are all the fiduciary duties legally possible.

15
Q

A listing agreement must:

A

Be in writing;

Under the statute of frauds, all listing agreements must be in writing. An agreement for a commission is not required to make a listing agreement legally binding. A listing agreement must have a definite termination date and cannot contain an automatic renewal provisions. A listing agreement does not bind a seller to sell, even if a full price non-contingent cash offer is presented.

16
Q

A verbal agency disclosure is legally adequate when:

A

None of the above (A licensee is acquiring property for his or her own personal residence, no written agency agreement has been created in writing, a real property transaction is all cash and the closing is to occur in less than 10 business days.)

Nevada requires a written agency disclosure form be given and acknowledged in all real estate transactions of 1 to 4 dwelling units.

17
Q

The relationship of a sales person to his/her broker is usually a:

A

Principal/agent relationship;

A real estate broker and all affiliated licensees are engaged in a principal/agent relationship.

18
Q

The duty to exercise reasonable skill and care is owed to:

A

The principal and third parties;

The duties to exercise reasonable skill and care and the duty to deal honestly and in good faith are owed to all parties regardless of whether the licensee is in an agency relationship with a party to a transaction or not.

19
Q

The duty of loyalty owed to the principal means that the agent must not:

A

Make any secret profits from the agency relationship and place the agents interest above those of the principal.

The duty of loyalty requires that the agent plus the interest of the principal above all others. To make a profit arising from the agency relationship that is not disclosed to the principal would be preaching the duty of loyalty.