Massachusetts Real Estate Salesperson Exam — All Questions
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An agency relationship in which the principal, by words or conduct, causes a third party to reasonably believe someone is their agent, is called agency by:
- a.Estoppel✓
- b.Ratification
- c.Express agreement
- d.Necessity
Agency by estoppel arises when a principal's words or conduct lead a third party to reasonably believe an agency exists, and the principal is then prevented (estopped) from denying it. Ratification is later approval of an act done without prior authority.
An agent's duty to keep and report accurate records of all money and property belonging to the client is the duty of:
- a.Loyalty
- b.Obedience
- c.Accounting✓
- d.Care
The duty of accounting requires the agent to accurately track and report all funds and property entrusted by the client, such as earnest money deposits. It supports the prohibition against commingling and conversion of client funds.