Agency Questions

Concept of Agency

Question:

Which of the following statements describes the concept of agency?

1. an agent is a representative who is expected to have greater expertise than the principal for the task to be performed

2. an agent is a representative who owes fiduciary duties to clients and customers

3. an agent is a real estate representative who is representing a principal brokerage

Answer:

  1. Historically, that was not true, but generally that is the case, most of the time (let’s say, 95%), today.
  2. No fiduciary duties are owed to Customers, only to Clients.
  3. This is actually true. The Sales Representative acts for (as “agent”)  the Brokerage and brings Consumers into a contract with the Brokerage, whereby the Brokerage will act as “Agent” for the Client (formerly, just a consumer) .

Let me put it this way: if this were a question on a law exam, the correct answer would be #3, but, I think that Humber  is looking for #1 for the 2 points on its exam.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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