Agency Law questions with complete solutions graded A+ already passed

Agency Law questions with complete solutions graded A+ already passedAgency one person called the principal empowers another person called an agent to perform a service Parties 1. Principal - the person that empowers the agent to perform an agency. Principal aka client 2. Agent - the person that has been empowered to perform a service 3. Sub-Agent - under the person that was empowered to perform the service. Creating an Agency 1. Expressed - oral or written as a stated fact 2. Implied - where you lead someone that you are responsible for their best interest. 3. Ostensible - when a third party does something that creates a agency responsibility. Obligations of an Agency 1. These are owed if there is a agency relationship which is called fiduciary duties. (a) It is the agent that owes these duties to the prinicipals aka clients Fiduciary Duties (7) duties owed to clients aka principals C - confidentialilty L - loyality O - obedience - only legal instructions T - trust D - due care (due diligence) A - accountability D - disclosure - you have a duty to disclosed all information to your client. Types of Agencies (3) How much authority is being granted: 1. Universal Agency - the agent is empowered to do everything (ex. property management) 2. General Agency - empowering the agent to act in area or trade 3. Special Agency - empowered to perform one act Duties to Third Parties aka Customers. 1. licensee's have to be honest and fair to customers. 2. no fiduciary duties are owed. 3. Absolute duty to disclosed defects in properties that are known. (ex. hidden defects - blaten defects) Customer third parties that no agency relationship exisit Client aka principal 1. agent owes the principal (client) fiduciary dutiies. 2. have a agency relationship with the agent Agency Disclosure Law for 1-4 family residential transactions where licensee have to disclose what their duties and services are going to be as well as their agency responsiblity if any prior to confidential information. Single Agency Where you represent only (1) person in the transaction Dual Agency 1. where you are representing (2) or more principals in the same transaction. 2. this requires knowledge and consent (except for property management) Termination of an Agency Relationship B - Bankruptcy of principal or agent A - Abandonment by principal or agent D - Death of principal or agent D - Destruction of property M - Mutual Consent I - Incompetency - court proven C - Completion E - Expiration