Agency
An agent who acts outside the scope of their authority, binding the principal to an unauthorized contract, has committed:
AActual agency
BOstensible agency✓ Correct
CUnauthorized practice of law
DBreach of fiduciary duty
Explanation
Acting beyond the scope of authority and binding the principal to an unauthorized agreement constitutes a breach of fiduciary duty, specifically the duty of obedience. The agent can be held personally liable for resulting damages.
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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.
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.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
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