law of agency check 2

  1. How many parties does it take to create an agency?
    Two; the principle and agent
  2. How many parties does it take for law of agency to work?
    Three; the principle, the agent, and third party
  3. Gratuitous agency
    A relationship that arises when an agent undertakes to give advice or professional service to another person for no compensation; helping a friend. Fiduciary duties still exist.
  4. The Texas Real Estate License Act addresses only compensation...
    Not who pays it
  5. Courts have held that agency relationships are created by one of three methods:
    Actual authority, ostensibly authority, or ratification.
  6. An agent can be hired to represent the purchaser as well as the seller
  7. Actual authority
    For this kind of agency relationship, there must be some act constituting appointment of a person as an agent, as it is a consensual relationship.
  8. Under actual authority, what must happen for the agency relationship to exist?
    Meeting of the minds: consent of both principle and agent, either expressed or implied, and some control by the principle over the agent.
  9. Actual authority can be...
    Verbal or written
  10. Implied authority
    A part of actual authority that is the authority an agent has because of custom in the industry: ex advertising.
  11. Ostensible authority (estoppel or apparent authority)
    the agent doesn't know of the agency relationship.  the conduct on the part of the principle would lead a purchaser to believe that the agent had the authority he or she purports to exercise. ex; a situation where the agent would be liable to his principal for misconduct or breach of fiduciary duties, but the licensee doesn't have the right to sue for commission.
  12. apparent authority is based on estoppel, which arises from which two sources?
    1: the principle knowingly permitting an agent to hold himself out as having requisite authority or 2: the principal may, by lack of ordinary care, lead a purchaser to believe that he actually has such authority by what the agent says or does.
  13. In order to establish an agency by estoppel, which two elements must be established?
    1: the principal must have held the agent out in other instances, or in the particular transaction, as possessing authority to be an agent, or he must have knowingly acquiesced in the agent's authority and 2: the person dealing with the agent must have relied on the conduct of the principal to the third party's detriment (loss, damage).
  14. It requires what to create an ostensible agency?
    the principal's participation
  15. Actual Authority
    expressed authority granted to an employee by business
  16. Implied authority
    • -inherent
    • -not expressed
    • -implied from job title
    • -implied from past courses of action
  17. ostensible/apparent authority
    • Agent represents that she has authority
    • -3rd party must believe that authority exists
    • -must be reasonable for 3rd party to believe
  18. ratify
    to confirm by expressing consent, approval; to ratify a constitutional amendment
  19. Agency by Ratification
    occurs when the principle ratifies the acts of the agent after the agency function has been performed.
  20. Acting as a principal, a person may purchase, sell, lease, or sublease real estate for profit without being licensed as a broker or salesperson.
    License Not required for principle
  21. net listing
    a listing agreement in which the broker's commission is the difference (net) between the sales proceeds and an amount desired by the owner of the real property
  22. A licensee may not appraise real property for others and for compensation without being licensed or certified as an appraiser.
  23. How many sqft are in an acre?
    43,560 sqft
  24. For a separate fee, a real estate licensee can provide an opinion of value or comparative market analysis.  What does the licensee have to do?
    Provide a written statement stating something like: this is an opinion of value or comparative market analysis and should not be considered an appraisal.
Card Set
law of agency check 2
real estate, law of agency ch. 2