Morgan's (V-C, D, E)

Question 1

The term for the position of trust marks an agent/principal relationship; the principal trusts the agent to ‘do right’

Answer 1

Fiduciary

Question 2

To steadfastly work for, never against, the best interests of the principal while applying expected, reasonable care, skill, and diligence in the performance of all transaction-related matters

Answer 2

Loyalty (or allegiance)

Question 3

To adhere to the principal’s instructions but DOES NOT include illegal actions

Answer 3

Obedience

Question 4

To give a fair and accurate accounting of all funds that are transaction-related even if that means after the transaction is over and the agency relationship has been terminated

Answer 4

Accounting

Question 5

To disclose all pertinent information to the principal

Answer 5

Disclosure

Question 6

To keep confidential all information that might weaken the principal’s interests, such as lowest acceptable price or unusual/extenuating circumstances

Answer 6

Confidence

Question 7

What are the important caveats to the principal of confidentiality?

Answer 7

• You may reveal confidential information with the principal’s permission ONLY
• Confidentiality does NOT apply to illegal information
• Confidentiality outlives the termination of the relationship

Question 8

What are the 5 fiduciary responsibilities?

Answer 8

COLAD

Confidentiality
Obedience
Loyalty
Accounting
Disclosure

Question 9

Which responsibilities outlast the termination of agency?

Answer 9

Confidentiality and accounting

Question 10

What 2 situations must be avoided by an agent with respect to accounting?

Answer 10

1. Commingling

2. Conversion

Question 11

___ means mingling (or combining) transaction funds with other funds that are required to be maintained separately.

Answer 11

Commingling

Question 12

___ refers to converting funds to another use than the one intended by the principal, or misappropriating them.

Answer 12

Conversion

Question 13

Any general exaggeration found in promotional materials or agent comments intended to creat a stronger impression of a property

Answer 13

Puffering (or puffing)

Question 14

Any variety of misleading statements or undisclosed facts that an agent reasonably should have known and disclosed

Answer 14

Misrepresentation

Question 15

Type of misrepresentation - making a careless statement where the exercise of due diligence and professional standards of care would have made the correct facts known

Answer 15

Negligent misrepresentation

Question 16

Type of misrepresentation - making a false statement (or failing to make a known material disclosure) that is likely to induce a reasonable party to act against that party’s own best interest

Answer 16

Material misrepresentation

Question 17

Intentional misrepresentation designed to persuade a party to make a decision the party would not have made had full and accurate disclosure been made

Answer 17

Fraud

Question 18

Legally “automatic” mechanisms such as when a contract is terminated upon the discovery of the lack of one or more necessary elements, as when a party does not actually have legal authority to enter into a contract in the first place

Answer 18

Operation of law

Question 19

List common occurrences that terminate contrast based on the operation of law.

Answer 19

1. Completion of the transaction through performance (or fulfillment) of contract elements
2. Expiration of the agency period
3. Lack of legal elements in the original contract

Question 20

List acts of parties that can serve to terminate a contract.

Answer 20

1. Mutual agreement of the parties
2. Revocation of contract by the principal
3. Renunciation (or abandonment) by the agent
4. Breach of contract

Question 21

In addition to the other factors previously listed, list reasons for terminating a listing agreement.

Answer 21

1. Bankruptcy of either party
2. Loss of title by seller (through tax sale, foreclosure, etc.)
3. Condemnation (through eminent domain)
4. Destruction of the property
5. Death or incapacity of one of the parties
6. Revocation of agreement by the principal
7. Renunciation of the agreement or abandonment of agency services of the agent