In NSW, what happens to an agency agreement if the principal dies before the property is sold?
Correct Answer
A) The agency ends automatically on the death
Agency agreements are personal contracts that automatically terminate upon the death of the principal. A new agreement would need to be established with the legal representatives of the estate if they wish to continue with the agent's services.
Why This Is the Correct Answer
An agent acts on the principal's authority, and the principal's death revokes that authority by operation of law. If the estate wants to sell, the executor or administrator must sign a new agency agreement.
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