Salesperson Tom in Great Falls, Montana negotiates a listing agreement on behalf of his supervising broker. The seller agrees to pay a 5% commission. After the property sells, the seller refuses to pay, claiming the commission rate was too high. Tom wants to sue the seller directly in his own name to recover the commission. Under Montana law, which of the following is most accurate?
Correct Answer
D) Tom cannot sue the seller directly; only the employing broker has the legal right to sue for commission under a listing agreement.
Under Montana law, a salesperson is licensed to perform real estate activities only under the supervision and authority of their employing broker. The listing agreement is a contract between the seller and the broker (not the salesperson), so the legal right to enforce the commission agreement and sue for payment belongs to the employing broker. The salesperson has no independent contractual relationship with the seller that would support a direct lawsuit for commission.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
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