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Flashcards in Mod 2 - Law of Agency Deck (160)
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1

The legal relationship created when one person delegates another person to act on his/her behalf when dealing with third parties

Agency relationship

2

What is created when one person, the agent acts on behalf of another, the principal, with the authority of that principal

An agency relationship

3

The person delegated to act on the principal's behalf

Agent

4

The party that retains the services of a real estate broker

The client
The principal

5

The party who is represented by an agent.

Principal

6

The amount of debt upon which interest is calculated

principal

7

The agent always represents his or her principal in a __ capacity

fiduciary capacity

8

One who holds a position of trust and confidence for another

fiduciary

9

the responsibilities owed by an agent to her principal, including duty of loyalty, duty of care, duty of disclosure

Fiduciary duties

10

A relationship between two parties (usually a principal and an agent) that is founded on trust, confidence, loyalty and good faith

Fiduciary relationship

11

When a licensee undertakes an agency relationship, what are they required to protect and promote as they would their own?

When a licensee undertakes an agency relationship, they required to protect and promote, as they would their own, the interests of the principal

12

The agent has an obligation of absolute fidelity to the __ ___, and an obligation to treat all parties to the transaction __ and __

Principal's interest
fairly and honestly

13

What are the 6 Fiduciary duties

OLD CAR
Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care

14

Describe the most important fiduciary duty owed to a principal

Loyalty. The agent must always put the interest of the principal first and ahead of all others. All actions of the agent should advance the position of the principal

15

All actions of the agent should advance the position of the principal describes which fiduciary duty

Loyalty

16

The act of disclosing; to expose

Disclosure

17

The agent must obey all reasonable and lawful instructions of the principal as they relate to the purpose of the agency relationship describes which fiduciary duty?

Obedience

18

T or F: In honor of the fiduciary relationship, agents must obey their principal's instructions, even though it may be unreasonable or unlawful

F
Agents only have to obey reasonable and lawful instructions.

19

T or F
The agent may share the principal's secret with other parties

F
The principal's secret should remain a secret. Confidential information shared with the agent must remain confidential and not be shared with other parties, unless authorization is given by the principal.

20

The principal's secret should remain a secret. Confidential information shared with the agent must remain confidential and not be shared with other parties, describes which fiduciary duty

Confidentiality

21

T or F
In fulfilling his fiduciary relationship with his principal, the agent may forego his obligation to treat all other parties fairly and honestly

F
The fiduciary duties does not relieve the agent of the obligation to treat all parties fairly and honestly

22

The agent must inform the principal of all facts which materially affect the subject matter of the agency describes which fiduciary duty

Disclosure

23

Information is considered ___ if a reasonable person would attach importance to its existence or non existence in deciding whether or how to proceed in the transaction.

Information is considered MATERIAL if a reasonable person would attach importance to its existence or non existence in deciding whether or how to proceed in the transaction. It is also considered material if the licensee knows or has reason to know that the recipient of the information regards, or is likely to regard it as important in deciding whether or how to proceed, even if others would not regard it as important.

24

Information is considered __ if the licensee knows or has reason to know that the recipient of the information regards, or is likely to regard it as important in deciding whether or how to proceed, even if others would not regard it as important

Information is considered material if the licensee knows or has reason to know that the recipient of the information regards, or is likely to regard it as important in deciding whether or how to proceed, even if others would not regard it as important

25

What are two ways to ascertain material information

1) inquiries to the seller/seller's agent about any physical conditions that may affect the property

2) a visual inspection of the property to determine if there are any readily observable physical conditions affecting the property

26

The agent must account for and safeguard all money other property belonging to the principal but in the agents temporary custody and control describes which fiduciary duty

Accounting

27

The agent needs to exercise reasonable skill, care and due diligence in the performance of her duties describes which fiduciary duty

Reasonable Care

28

T or F
As part of the agent's fiduciary duty of reasonable care, an agent is expected to perform all tasks required by the principal, regardless of whether they possess the skill training or expertise

F
If the agent does not possess the skill, training or expertise to properly represent the principal she needs to enlist the services of someone who does or suggest to the principal that they seek advice and assistance from another source

29

What are the three types of agency relationship. Who is the agent and who is the principal

A: Broker, P: Seller
A: Broker, P: Buyer
A: Salesperson, P: Broker

30

A person who conducts business with a real estate broker but is not represented by the broker.

Customer
third party