Chapter 12 Authority Flashcards
Consider a situation in which the principal is the seller, the agent is the listing agent, and there is no dual agency. Which of the following events will terminate the real estate agency relationship?
(1) The principal’s refusal to accept an offer to purchase presented by the agent where the offer exactly complies with the requirements in the listing contract.
(2) An act of the principal that is inconsistent with the continuation of the agent’s authority.
(3) An offer by the agent to personally purchase the principal’s property.
(4) The revocation of an offer to purchase by the offeror before the principal can accept
2
Alan is Peter’s agent with the express authority to rent Peter’s cottage for the summer months. However, in his capacity as Peter’s agent, Alan accepts an offer to purchase the cottage instead. When Peter discovers the incident, he is so impressed by the price, he calls and tells the buyers that he adopts Alan’s act. Which of the following is the result of these actions at law?
(1) Peter has ratified Alan’s actions, therefore the buyers cannot sue Alan for breach of warranty of authority.
(2) When Peter adopted Alan’s act, he created legal authority by means of revocation.
(3) Peter did not need to adopt Alan’s act because Alan had apparent authority.
(4) None of the above.
1
Coralee asked Tim to sell her car and her mountain bike for her while she was away on holiday. She gave Tim the keys to the car and told him to accept any price in excess of $1,700 for the car, and $300 for the bike. Which of the following is an example of implied authority?
(1) Tim sold the car to Cherise for $1,750.
(2) Before Cherise was willing to purchase the car, she insisted that she test drive the car and have it checked by the automobile association, which Tim allowed her to do.
(3) When Cherise was viewing the car, she noticed a small roof rack sitting in Coralee’s garage. She said that she would like to buy the rack to carry her camping gear on Coralee’s car. Tim said that he would include the rack in the sale for an additional $75, to which Cherise agreed. When Coralee returned, she told Tim that she was pleased that he had sold the rack, since she had no more use for it.
(4) After advertising the bike for sale at $300 in vain, Tim sold the bike to Sandra, the only person to make an offer, for $260. Coralee accepted the money when she returned, although she was disappointed not to get the full price.
2
One or more of the following statements are TRUE.
A. A listing contract is a specialized form of agency contract.
B. Real estate brokerages always work on behalf of the seller in respect of a real estate transaction.
C. Under the Designated Agency system, while the brokerage contracts with the seller or buyer, an individual licensee is appointed to act as the sole agent of that seller or buyer.
D. An agent’s authority to bind his or her principal depends entirely on the express authority given by the principal, and not upon implied, usual or customary authority.
Which of the above statements are TRUE?
(1) All of the above statements are true.
(2) Only statements A and C are true.
(3) Only statements B, C and D are true.
(4) Only statement D is true.
2
Which one of the following types of authority would NOT provide an agent with sufficient authority to create a binding contract between his principal and a third party?
(1) implied authority
(2) apparent authority
(3) assumed authority
(4) express authority
3
In which of the following situations where express authority exists would an agent have authority to act?
(1) the agent is an infant
(2) the agent is insane
(3) the agent is sane but the principal is insane
(4) None of the above-mentioned agents has authority to act on behalf of the principal.
1
When an agent acting within the scope of his authority and having disclosed that he is acting as an agent enters into a contract with a third party, the parties to that contract are:
(1) the agent and the principal.
(2) the principal and the third party.
(3) the third party and the agent.
(4) the principal, the agent and the third party.
2
Where a principal of an agent has acted in such a manner as to lead third parties to believe that his agent has authority to perform certain acts on his behalf, and the third party, when dealing with the agent, reasonably believes that the agent has the authority that he/she represents, the agent is said to have:
(1) actual authority.
(2) express authority.
(3) legal authority.
(4) apparent authority.
4
Which one of the following is FALSE? An agent’s authority to act on behalf of the principal may arise:
(1) expressly.
(2) contingently.
(3) by implication.
(4) by ratification.
2
Where an agent, with express authority, enters into a contract with a third party on behalf of his principal and the third party knows he/she is an agent, who will the law recognize as parties to that contract?
(1) the agent and the third party
(2) the agent, the principal and the third party
(3) the principal and the third party
(4) none of the above combinations
3
Paul signed a power of attorney giving Audrey the right to sell his sailboat for a minimum price of $25,000 in his absence. Audrey sold the boat to Teresa for $20,000. What is the legal result?
(1) Paul would succeed against Audrey for damages for breach of the agency contract.
(2) Paul would succeed against Audrey for breach of her warranty of authority.
(3) Audrey has done nothing wrong.
(4) Both (1) and (2) are legal results.
1
An agent’s authority can be created retroactively by his principal by an action called:
(1) rectification.
(2) ratification.
(3) rescission.
(4) revocation
2
Where a principal adopts a contract that the agent entered into without any authority:
(1) the third party is not obligated to honour the contract.
(2) the agent cannot be given authority after the fact.
(3) the agent is given authority retroactively to enter into that contract.
(4) the principal can sue the agent for breach of warranty of authority.
3
Where an agent with authority enters into a contract with a third party and does not disclose that he or she is acting as an agent:
(1) the third party may sue either the agent or the principal to enforce the contract.
(2) the principal may sue the agent to enforce the contract.
(3) only the agent may sue the third party to enforce the contract.
(4) there is no contract in existence because there is no disclosure.
1
An agent will be personally liable to third parties:
(1) whenever the agent contracts on behalf of a principal.
(2) where the agent fails to disclose that he/she is an agent.
(3) where the agent has no written authority.
(4) in all of the above circumstances.
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