What is 'ostensible agency' (also called apparent agency)?
Why Agency created when a principal allows a third party to reasonably believe someone is their agent Is Correct
Answer B: Agency created when a principal allows a third party to reasonably believe someone is their agent
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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- Which type of agency is created when a principal's actions lead a third party to reasonably believe an agency relationship exists?Agency
- An agent who creates the impression of being someone's agent through conduct, even without an express agreement, has created what type of agency?Agency
- Which fiduciary duty requires an agent to keep the principal's confidential information secret even after the agency relationship ends?Agency
- What is the term for an agency created by written or oral agreement between the principal and 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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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.
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