Part 9 Flashcards
- What is trademark dilution?
A. Using a fake logo
B. Registering too many similar names
C. When a trademark becomes so generic that it loses its protection
D. Using a trademark on products outside its industry
C
What is defamation?
A. Using someone’s image in an ad without permission
B. A false statement made publicly that harms someone’s reputation
C. A negative review posted anonymously
D. Criticizing a competing brokerage’s marketing strategy
B
What’s the difference between slander and libel?
A. Slander is verbal; libel is written or published
B. Slander is accidental; libel is intentional
C. Slander is about property; libel is about services
D. Slander is legal in real estate; libel is not
A
Which of the following is an example of false light?
A. Posting a fake online review
B. Sharing a technically true fact that creates a misleading or damaging impression
C. Copying a competitor’s listing photos
D. Sharing a private email publicly
B
Which of these must be true for a defamation claim to hold up?
A. The statement was shared privately
B. The statement was true
C. The statement was false and shared with someone else
D. The person defamed is a public figure
C
In a real estate context, defamation could occur if an agent:
A. Shares sold prices that are public record
B. Says another agent committed fraud without evidence
C. Posts a listing before it’s live
D. Discusses market trends publicly
B
Which agency can enforce federal laws against unfair competition?
A. Department of Housing
B. Real Estate Commission
C. Federal Trade Commission (FTC)
D. National Association of Appraisers
C
. A competitor harmed by unfair advertising could:
A. Call the police
B. File a private civil lawsuit for damages and injunctive relief
C. File a criminal complaint with the IRS
D. Submit a review to the Better Business Bureau
B
What is injunctive relief?
A. A refund for damages
B. A court order to stop the unfair practice
C. A monetary penalty
D. A formal apology
B
What is disgorgement of profits?
A. Reinvesting illegal earnings into marketing
B. Seizing personal assets of a broker
C. Forcing the business to give up money made from unfair practices
D. Charging the business twice their earnings in fines
C
Which of the following is not a method of enforcing unfair competition laws?
A. FTC enforcement
B. Professional association sanctions
C. Criminal charges in some cases
D. Ignoring the violation if no one complains
D
Which of the following scenarios is most likely to result in injunctive relief under unfair competition laws?
A. A broker uses misleading statistics in advertising, causing short-term confusion.
B. An agent falsely accuses a competitor of illegal conduct in a private conversation.
C. A firm continuously uses a trademarked logo without permission after being warned.
D. A client posts a negative online review that includes inaccurate details.
C/ Explanation: Injunctive relief is a court order to stop ongoing unlawful activity. Continuous misuse after a warning typically leads to this.
Which enforcement method is most likely to apply when a REALTOR® violates the NAR Code of Ethics?
A. State attorney general enforcement
B. Civil lawsuit filed in district court
C. Industry self-regulation by NAR
D. Criminal prosecution by the FTC
C
A brokerage engages in misleading advertising, resulting in consumer confusion and financial gain. Which remedy is the most appropriate in addition to a cease-and-desist order?
A. Corrective advertising and disgorgement of profits
B. Civil fine from the county assessor
C. Suspension of the broker’s personal license
D. Revocation of state franchise tax rights
Correct Answer: A
Explanation: Disgorgement removes ill-gotten gains. Corrective advertising is used to fix public confusion.
Which of the following best illustrates the purpose of disgorgement of profits in unfair competition cases?
A. Punishing businesses that intentionally defame competitors
B. Forcing a business to forfeit money earned from deceptive practices
C. Awarding additional compensation to the harmed consumer
D. Reimbursing state regulatory agencies for legal costs
B/ Explanation: Disgorgement targets profit made through unfair advantage. It’s not punitive; it’s restorative.
A license holder pressures a first-time buyer into signing a contract with confusing terms that strongly favor the seller. This may be considered:
A. A fair transaction if no law was broken
B. An acceptable business tactic
C. An unconscionable contract
D. Standard competitive practice
C
Which of the following examples best represents misrepresentation by omission?
A. The agent falsely claims the home was recently remodeled
B. The agent forgets to mention an undisclosed foundation problem
C. The agent exaggerates the quality of neighborhood schools
D. The agent understates the lot size by accident
B
What distinguishes an unconscionable action from regular poor judgment in a transaction?
A. It involves a verbal agreement instead of written terms
B. It creates a minor disadvantage for the client
C. It exploits the consumer’s lack of knowledge or ability to an extreme degree
D. It results in a delayed closing date
C
A license holder accidentally gives a buyer outdated information about the school district, which the buyer relies on when making an offer. This is best classified as:
A. Fraud
B. Puffery
C. Misrepresentation
D. Unconscionable conduct
C
Which of the following is not a responsibility of the FTC’s Bureau of Consumer Protection?
A. Receiving consumer complaints
B. Prosecuting criminal acts unrelated to commerce
C. Developing rules for fair business practices
D. Educating businesses about consumer protection laws
B / Explanation: The FTC does not prosecute unrelated crimes. Its scope is limited to consumer and business fairness.
What is the primary role of the Federal Trade Commission (FTC) in the real estate industry?
A. Licensing agents and brokers
B. Regulating commission splits
C. Protecting consumers from unfair, deceptive, and fraudulent business practices
D. Enforcing MLS advertising rules
C
Under federal law, a broker who accepts a payment from a title company for sending referrals may be violating which of the following?
A. The Lanham Act
B. The Real Estate License Act
C. RESPA (Real Estate Settlement Procedures Act)
D. The Sherman Antitrust Act
C/ Explanation: RESPA strictly prohibits kickbacks for referrals of settlement services.
. What makes blockbusting illegal under fair housing laws?
A. It leads to unethical price inflation
B. It pressures owners to sell based on racial or social fear-mongering
C. It involves overpricing homes to create exclusivity
D. It encourages dual agency arrangements
B /Explanation: Blockbusting manipulates homeowners by inciting panic, often tied to racial or socioeconomic changes.
Which of the following best describes redlining in real estate?
A. Raising prices in high-demand neighborhoods
B. Denying services in certain areas due to the racial or ethnic composition
C. Offering discounts in low-income zones
D. Color-coding neighborhoods for pricing analysis
B / Explanation: Redlining is the practice of refusing to offer loans, insurance, or services based on geographic area tied to race or ethnicity.
