Agency
Under Nebraska law, what happens to an agency relationship when the principal (seller or buyer) becomes mentally incapacitated?
AThe agent assumes full authority to make all decisions
BThe agency relationship terminates unless there is a durable power of attorney✓ Correct
CThe agent must continue at full capacity until a guardian is appointed
DThe NREC takes over management of the transaction
Explanation
Mental incapacity of the principal generally terminates a regular agency relationship. Only a durable power of attorney (specifically designed to survive incapacity) allows the agent to continue acting for the incapacitated principal.
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