Apparent authority of an agent arises when:
Why Third parties reasonably believe the agent has authority based on the principal's conduct Is Correct
Answer B: Third parties reasonably believe the agent has authority based on the principal's conduct
Exam Tip: Agency
Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.
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Related Alabama Questions
- Which type of agency is created when a principal's actions lead a third party to reasonably believe an agency relationship exists?Agency
- Which fiduciary duty requires an agent to keep the principal's information private from third parties?Agency
- A real estate agent's authority to bind their principal in a contract is known as:Agency
- Which of the following actions would constitute a breach of fiduciary duty by a buyer's agent?Agency
Key Terms to Know
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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