Law of Agency Study Guide Questions and Answers Rated A+

Law of Agency Study Guide Questions and Answers Rated A+ What are the duties of an agent? OLDCAR - Obedience Loyalty Disclosure Confidentiality Accounting of funds Reasonable care and due diligence General agent An individual has the right to represent his or her principal in a particular type of transaction or business. One common example is the property manager. Special agent The most limited of all the agency relationships. The agent may perform only limited duties for the principal. The agent is not able to bind (obligate) the principal because he or she isn't allowed to sign or accept any terms or conditions on behalf of the principal. The agent must only follow the instructions of the principal. An example of this is a listing agreement or a buyer/tenant representation agreement. IRS Independent Contractor Status rules - Commissions must compensate the sales agents. - Not required to follow policies and procedures manual. - Shall pay his own expenses. - Cannot be made to attend sales meetings. - Cannot be made to attend training seminars. - Cannot be made to work set hours. - Should not be cipation in broker's insurance or retirement programs. Termination of agency relationship - The purpose of the agency is completed (ex. property is sold) - Expiration of the period stated in the listing contract - At any time by mutual agreement - Death or incapacity of either party - 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 agreement at any time by the principal - Termination of agreement at any time by the broker Sherman Anti-Trust and commission rates Prevents any combination in restraint of trade. Commission rates must always be a matter of negotiation between the broker and the client. Details in a valid listing - Parties that are included in the agreement - Property information (lot, address, city, etc.) - Listing price - Term - Broker compensation Duties of the principal and definitions of duties CRIP - Compensation, Reimbursement, Indemnification, Performance Compensation The agent should be paid on the completion of the agency. Reimbursement The principal should reimburse the agent for expenses incurred on behalf of the principal, above and beyond the expenses related to the sale itself. Indemnification The principal will protect the agent from suffering a loss due to the agent's reliance on information received from the principal. Performance The principal is expected to perform in the agen