AgencyIntermediateCalifornia Exam

In California, an agent's duty of 'obedience' to their principal means the agent must:

AFollow all instructions from the principal, including unlawful ones
BFollow all lawful instructions from the principal, even if the agent disagreesCorrect
CDefer to the principal's judgment on all pricing and marketing decisions without question
DObey the broker's instructions above the seller's instructions at all times

Why Follow all lawful instructions from the principal, even if the agent disagrees Is Correct

Answer B: Follow all lawful instructions from the principal, even if the agent disagrees

The duty of obedience requires the agent to follow the principal's lawful instructions, even if the agent personally disagrees with them. However, an agent must NOT follow instructions that are unlawful, unethical, or require violating fiduciary duties to the client.

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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