A licensed Alabama salesperson, acting as a buyer's agent, prepares a purchase offer for her client. While writing the contract, she realizes that if she also represents the seller, she would earn the full commission. She approaches the seller and begins advising him on the transaction without disclosing her existing buyer representation to either party. Which of the following best describes the legal consequence of this conduct under Alabama law?
Correct Answer
B) The salesperson has engaged in undisclosed dual agency, which is grounds for license revocation under Alabama law
Under Alabama Agency Law (Code of Alabama §34-27-81 et seq.), dual agency is only permissible as 'limited consensual dual agency,' which requires the written informed consent of ALL parties BEFORE the dual agency situation arises. The salesperson in this scenario represented both parties without disclosure or consent — this constitutes undisclosed dual agency, which is a serious violation of Alabama license law and is grounds for license revocation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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