Implied agency can be inadvertently created when an agent acts on behalf of someone or provides services that suggest a fiduciary relationship. This is problematic because it can create legal obligations the agent didn't intend.
A listing agent repeatedly gives a buyer advice on negotiation strategy, recommends inspectors, and helps the buyer structure an offer. Even without a written agreement, the agent's conduct may create an implied agency with the buyer, creating fiduciary obligations.
Implied agency is a TRAP on the exam. Agents can accidentally create agency through their conduct. The best protection is to have written agreements and clearly disclose who you represent. Providing buyer-level services without an agreement = risk of implied agency.
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Frequently Asked Questions
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