Basic Agency (Ontario)
Question:
Which of the following statements best describe the concept of agency:
a. An agent is a representative who is expected to have greater expertise then the principal for the task to be performed.
b. An agent is a representative who own fiduciary duties to the customers and the clients
c. An agent is an independent contractor who operates without any control & guidance by the principal
d. An agent is a real estate salesperson who is representing a principal brokerage
Answer:
“A” in many situations that would be the case, however, when it comes to commercial transactions it’s often the Client who has the most knowledge.
“B” no fiduciary duties are owed to Customers.
“C” this is an incorrect statement.
“D” Yes, sometimes this is correct.
The question posed was “best describes”. My guess is that in “D” there was a slight trick to the question. The Brokerage was described as the Principal”. In most situations involving the material that you are studying, the Seller is the Principal and the Brokerage is the Agent of the Seller.
In many situations, the Sales Representative is “agent” of the Brokerage, who is the Principal when a listing presentation is being made to have the Seller enter into a contract with the Brokerage where the Seller will be the Principal and the Brokerage will be the Agent.
If that was inserted as a little “trick”, then D would be your choice.
However, the “more expertise” might also be what they would be looking for.
Comments(0)