Law of Agency – Exam Questions and Answers 100% Pass

Law of Agency – Exam Questions and Answers 100% Pass Duties of an Agent Obedience, Loyalty, Disclosure, Confidentiality, Accounting and Reasonable care - OLD CAR General vs. Special Agent General: has less authority than the universal agent. An individual has the right to represent his or her principal in a particular type of transaction or business. Special: the most limited of all the agency agent may perform only limited duties for the principal. Not able to bind (obligate) the principal because he or she is not allowed to sign or accept any terms or conditions on behalf of the principal. e special agent must simply follow the instructions of the principal. IRS independent Contractor Status Rules - Commissions must compensate the sales agents. There are to be no advances against their commissions. -There may be a policies and procedures manual provided but there may not be mandatory compliance with the policies. It is only a suggested procedure manual. -The sales agent shall pay his own business expenses. -The sales agent cannot be made to attend sales meetings. -The sales agent cannot be made to attend training seminars. -The sales agent cannot be made to work set hours. A broker can require that the agent be "full time," but cannot dictate set work hours. - Sales agents should not be offered participation in the broker's insurance or retirement program. Termination of Agency Relationship - When the purpose of the agency is completed -The expiration of the period stated in the listing contract. -At any time by mutual agreement. -Death or incapacity of either party (principle or broker-not an agent) -Condemnation or destruction of the property. -Bankruptcy of either party. -Operation of law. -Revocation of the broker's license. -Abandonment by the agent. -Revocation of the agreement at any time by the principal. -Termination of the agreement at any time by the broker. Sherman Antitrust Act / Compensation Rates prevents any combination in restraint of trade. Commission rates must always be a matter of negotiation between the broker and the client. Any hint that there is a "standard" or "going rate' for commissions in a given market area could be evidence of violation and restraint of trade. Any attempt to boycott a discount real estate broker is a violation. Attempts to limit competition by allocating markets or customers is also a violation. Any attempt by a group of brokers or brokerage firms to set the commission rates in their area would be considered illegal price- fixing. Valid Listing - The signatures of all of the owners and the listing agent - A legal description of the property, including the street address - The list price of the property as set by the seller -