A buyer and seller in Alabama enter into a written purchase agreement. The seller's agent is also representing the buyer in the same transaction without obtaining written consent from either party. The parties later discover this arrangement. Under Alabama law, which of the following is the most accurate statement about the enforceability of the purchase contract and the agent's license status?
Correct Answer
B) The contract may be voidable, and the agent's license is subject to revocation for undisclosed dual agency
Under Alabama Agency Law (Code of Alabama §34-27-81 et seq.), dual agency — called 'limited consensual dual agency' in Alabama — requires written informed consent from all parties before the dual agency relationship arises. Undisclosed dual agency violates Alabama law and is grounds for license revocation. The purchase contract itself may be voidable at the option of the harmed party because it was procured through a material breach of fiduciary duty, but it is not automatically void.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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