In Arizona, 'ostensible agency' (apparent authority) is created when:
Why The principal's words or conduct lead a third party to reasonably believe that someone has authority to act as agent, even if no agency agreement exists Is Correct
Answer B: The principal's words or conduct lead a third party to reasonably believe that someone has authority to act as agent, even if no agency agreement exists
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.
Key Agency Terms in This Question
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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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