Reference no: EM139956

Q. 1. Which of the following is true of real estate commissions?
1) If the seller has not given the broker a specific closing date, the law assumes the contract to end 30 days after the creation of the contract, but the broker will not be entitled for a commission.
2) If the seller has not given the broker specific terms of price or closing date then the commission is not earned until the contract of purchase has been made.
3) If the seller has not given the broker a specific closing date, the broker can assume a reasonable closing date also can also claim a commission for an incomplete sale.
4) If the seller has not given the broker specific terms on price, the broker can sell the property on his own terms also claim for the commission.

2. A real estate broker was hired as a rental agent for a house. The house burnt down due to accidental causes. In this circumstance:
1) the agency is automatically transferred to other properties of the principal.
2) The agency automatically ends as the subject matter of the agency is destroyed.
3) The agency may be terminated only by mutual consent.
4) The agent is liable to be compensated even if the aim to the agency has not been accomplished.

3. Independent contractors:
1) just bring the parties together rather than actually negotiating a contract of sale.
2) Are under the control of their employer/principal as to both the objective of their work also the means used to achieve it.
3) Are under the control of their principals as to the result that is to be achieved, but not as to the means used to accomplish that result.
4) Do not maintain their own inventory of goods; instead, they take orders on behalf of their principal.

4. An "agency at will" means that:
1) each party has the power to terminate the agency even if there is no contractual right to do so.
2) Only the principal has the right to terminate the agency at his will.
3) Only the agent can terminate the agency.
4) Both parties may mutually agree to modify their agency contract at will.

5. An agency coupled with an interest means:
1) either party may terminate the agency at any time.
2) The agency may not be able to recover the debt in the event of the principal's death.
3) The agency is irrevocable without the consent of the agent.
4) Each party has the power to terminate without breach of contract if done so within 18 months.

6. If no time or event is specified explaining when the agency relationship will end, the agency:
1) automatically ends when the result for which the agency was produced has been accomplished.
2) Automatically ends after a period of 70 days even if the result for which the agency was produced has not been accomplished.
3) Will continue indefinitely.
4) Will continue for the statutory maximum of 10 years.

7. Under the "procuring cause" rule, when the agent is the primary factor in a purchase:
1) the agent is entitled to compensation only if he completes the sale even after termination of the agency relationship.
2) The agent is not entitled to compensation because the agent did not actually "seal the deal."
3) The agent may be entitled to a commission regardless of who eventually completes the sale.
4) The agent is not entitled to compensation after termination of the agency relationship.

8. To avoid being bound by the acts of the agent after the agency has ended, the principal:
1) should give verbal notice if the termination is due to loss of legal capacity by the principal.
2) Should give constructive notice to those who have dealt with the former agent.
3) Should give actual notice if the termination is due to impossibility of performance.
4) Should give actual notice to those who have dealt with the former agent.

9. When a principal breaches a duty owed to the agent, the agent:
1) may only bring a lawsuit against the principal for physical injuries suffered.
2) Does not have a lien on anything that belongs to the principal which is in the agent's lawful possession.
3) May claim the principal's property that is in his lawful possession for compensation due him for his performance of the agency responsibilities.
4) May not terminate the agency until the contract has expired.

10. When an agent's breach of duty causes harm to the principal:
1) the principal is not liable to compensate the agent, even if the breach is serious enough.
2) The principal is liable to elucidate how actual damages to avoid having to compensate.
3) The principal can bring an action in court even if compensation is due.
4) The principal may deduct the loss from the amount due the agent.

11. An agency relationship:
1) can be either compensated or uncompensated.
2) Can be formed only by contract.
3) Will not exist if the parties have expressly agreed that they do not intend to create one.
4) Exists only when it is in the form of a written document signed by both the parties.

12. When agents make advances from their own funds in conducting the principal's business, the principal:
1) has no duty to reimburse the agent because the agent has assumed the burden.
2) Has no duty to reimburse the agent because the agent commingled fungible goods.
3) Has a duty to reimburse the agent even if the agent is not acting within the scope of his/her authority.
4) Has a duty to reimburse the agent for expenses incurred for the principal.

13. If an agent indulges in commingling:
1) he is breaching the duty to communicate information.
2) he probably will not be liable for loss to the principal.
3) he bears the risk of any loss to the principal.
4) he will not be liable for any loss to the principal if the property is not wrongfully used.

14. To avoid being bound by the acts of the agent after the agency has ended, the principal should give constructive notice:
1) to those who knew of the agency but had never dealt with it before termination.
2) to those who have dealt with the former agent.
3) to those who never knew of existence of the agency.
4) to everyone who the principal was in contract with before the termination.

15. A person may act as a dual agent:
1) on his own accord.
2) with the consent of both principals on being fully informed about it.
3) after partial disclosure of terms to either principal.
4) with the consent of any one principal.

16. Whenever the agent's duties to the principal conflict with the agent's own interests:
1) there is no duty of disclosure if the agency is gratuitous.
2) the agent must resign immediately.
3) the agent automatically is regarded as having breached the duty of loyalty.
4) the agent must disclose such facts to the principal, or be in violation of the duty of loyalty.

17. When an agent breaches a duty owed to the principal, the agent:
1) may not be discharged until contractual damages are paid.
2) may not be discharged until the contract has expired.
3) may be discharged only if the principal can Elucidate how actual damage.
4) may be discharged without liability in spite of an unexpired contract.

18. Which of the following is true of an agent's duty to obey a principal's instructions?
1) An agent will be liable for any loss to the principal caused by failure to follow instructions.
2) An agent has no power to exercise his/her best judgment to further the interests of the principal, if no instruction is given.
3) An agent may always substitute his/her personal judgment for that of the principal.
4) An agent may ignore the principal's instructions if they seem unwise or not truly in his/her best interests.