Broker Contract Law (New 2026/ 2027
Update) Questions & Answers {Grade A}
100% Correct (Verified Solutions)
Sal the salesman works for Betty the broker. Betty enters into a listing agreement with
Cheryl the seller. Which of the following best describes these relationships?
a. subagency
b. general agency
c. special agency
d. both a and c - Correct answer D
In order to work for Betty as a salesman, Sal must be a subagent of Betty. Sal could
also be a subagent of Cheryl but the facts are not clear. Betty is an agent of Cheryl.
Betty's agency is most likely a special agency relationship (the typical brokerage
relationship). No on is likely to have a general agency on these facts
The buyer broker agreement is the most similar to the exclusive right to sell contract
is:
a. exclusive buyer agreement
b. exclusive agency agreement
,c. open buyer agreement
d. exclusive right to sell - Correct answer A
the exclusive buyer agreement is the counterpart to the exclusive right to sell
agreement
Which of the following would not be a latent defect that the seller must disclose to the
buyer
a. termite damage
b. non-functioning furnace
c. seasonal flooding
d. cracked foundation - Correct answer B
The broker must disclose all material facts about about the physical condition of the
property that are known to the broker. All listed items are latent defects (hidden or not
readily discoverable by inspection) except the broken furnace, which is more easily
discoverable
,Broker Sam lists a house and sells it 2 months into the listing period. After closing
Sam tries to collect his commission but the seller refuses and correctly asserts that
he is not legally obligated to pay. What type of listing did Sam have?
a. exclusive agency listing
b. open listing
c. net listing
d. exclusive right to sell listing - Correct answer C
With a net listing (which is illegal in most states) the seller specifies the new amount
he must receive and the broker gets anything over and above that amount. If the seller
did not get his specified net, then the broker would not be entitled to a commission
even though he sold the property. In all other forms, the commission would be due if
the broker sold the property
Brokers may assist buyers only if:
a. there is a written agreement
b. there is a formal representation
c. there is an agency relationship
, d. there is consent - Correct answer Brokers may assist buyers with or without a
written agreement, formal representation or and agency relationship. However, there
must be some sort of consent, implicit or explicit
A general agency empowers the agent to:
a. transact matters of all types for the client
b. transact the client's affairs on a certain business
c. perform only certain acts for the client
d. performa any legal act for a client - Correct answer B
A general agent is authorized to perform any and all acts associated with a certain
business. The other choices are too broad or two narrow
Jill lists her property with broker Jan. However before the property sells, Jan declares
bankruptcy. Jill terminates the agreement. Can she do this without causing a breach of
the contract?
a. no, only Jan may terminate the contract without breaching it
b. yes, because she is justified legally
c. no, unless Jan is in breach of the terms
Update) Questions & Answers {Grade A}
100% Correct (Verified Solutions)
Sal the salesman works for Betty the broker. Betty enters into a listing agreement with
Cheryl the seller. Which of the following best describes these relationships?
a. subagency
b. general agency
c. special agency
d. both a and c - Correct answer D
In order to work for Betty as a salesman, Sal must be a subagent of Betty. Sal could
also be a subagent of Cheryl but the facts are not clear. Betty is an agent of Cheryl.
Betty's agency is most likely a special agency relationship (the typical brokerage
relationship). No on is likely to have a general agency on these facts
The buyer broker agreement is the most similar to the exclusive right to sell contract
is:
a. exclusive buyer agreement
b. exclusive agency agreement
,c. open buyer agreement
d. exclusive right to sell - Correct answer A
the exclusive buyer agreement is the counterpart to the exclusive right to sell
agreement
Which of the following would not be a latent defect that the seller must disclose to the
buyer
a. termite damage
b. non-functioning furnace
c. seasonal flooding
d. cracked foundation - Correct answer B
The broker must disclose all material facts about about the physical condition of the
property that are known to the broker. All listed items are latent defects (hidden or not
readily discoverable by inspection) except the broken furnace, which is more easily
discoverable
,Broker Sam lists a house and sells it 2 months into the listing period. After closing
Sam tries to collect his commission but the seller refuses and correctly asserts that
he is not legally obligated to pay. What type of listing did Sam have?
a. exclusive agency listing
b. open listing
c. net listing
d. exclusive right to sell listing - Correct answer C
With a net listing (which is illegal in most states) the seller specifies the new amount
he must receive and the broker gets anything over and above that amount. If the seller
did not get his specified net, then the broker would not be entitled to a commission
even though he sold the property. In all other forms, the commission would be due if
the broker sold the property
Brokers may assist buyers only if:
a. there is a written agreement
b. there is a formal representation
c. there is an agency relationship
, d. there is consent - Correct answer Brokers may assist buyers with or without a
written agreement, formal representation or and agency relationship. However, there
must be some sort of consent, implicit or explicit
A general agency empowers the agent to:
a. transact matters of all types for the client
b. transact the client's affairs on a certain business
c. perform only certain acts for the client
d. performa any legal act for a client - Correct answer B
A general agent is authorized to perform any and all acts associated with a certain
business. The other choices are too broad or two narrow
Jill lists her property with broker Jan. However before the property sells, Jan declares
bankruptcy. Jill terminates the agreement. Can she do this without causing a breach of
the contract?
a. no, only Jan may terminate the contract without breaching it
b. yes, because she is justified legally
c. no, unless Jan is in breach of the terms
