Chapter 12

Question 1

What is an agent at common law?

Answer 1

At common law, an agent is any person who contracts to act for or on behalf of another, who in turn, is known as the principal.

Question 2

The doctrine of ___ ___ states that no one who benefits by the labour and materials of another should be unjustly enriched thereby.

Answer 2

quantum meruit

Question 3

Define the three situations at common law in which an agent can be liable to a third party:

Answer 3

1. where the agent fails to disclose that he or she is an agent
2. where the agent has no authority to act as an agent
3. where the agent commits a tort

Question 4

What two key aspects are part of the duty of loyalty owed by an agent to a principal?

Answer 4

The duty of loyalty includes:

1. the duty of complete disclosure of all material facts, and
2. the duty to keep information that would affect the principal’s negotiating position confidential.

Question 5

A warranty of ___ is an agent’s guarantee to third parties that his/her actions fall within the scope of authority given by the ___.

Answer 5

authority

principal

Question 6

TF? The agency relationship may be terminated by the death, insanity or bankruptcy of either the principal or agent.

Answer 6

true

Question 7

List 3 facts regarding an open listing

Answer 7

1. it can be given to any number of licensees
2. only the licensee who first acquires a buyer ready, willing and able to meet the terms of the listing is compensated.
3. the sale of the property automatically terminates the listing.