AgencyIntermediateArizona Exam

Ratification of an unauthorized act by an agent in Arizona means:

AThe agent is immediately relieved of liability since ratification by the principal transfers full legal responsibility to the principal for the unauthorized act

BThe principal accepts and approves the agent's unauthorized action after the fact, creating a valid binding resultCorrect

CThe unauthorized act is treated as void until the principal files a formal ratification with the county recorder and the other party is notified in writing

DADRE reviews the unauthorized act independently and may impose disciplinary action regardless of whether the principal has ratified the conduct

Why The principal accepts and approves the agent's unauthorized action after the fact, creating a valid binding result Is Correct

Answer B: The principal accepts and approves the agent's unauthorized action after the fact, creating a valid binding result

Ratification occurs when a principal, with full knowledge of an agent's unauthorized act, expressly or impliedly accepts and approves it. This retroactively validates the agent's action as if it had been authorized from the start.

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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Key Terms to Know

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Dual Agency

A situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.

Fiduciary Duty

The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

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