Laws of Agency Exam Questions
Laws of Agency is one of the most critical exam topics at 12%, covering the fiduciary relationship between real estate agents and their clients, including the six fiduciary duties (OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable Care). Understanding agency law is fundamental to professional conduct and appears throughout many other exam topics. You will need to master how agency relationships are created (express, implied, apparent), the difference between client and customer obligations, and the rules governing dual agency. Scenario-based questions are particularly common in this topic, requiring you to apply agency principles to realistic situations involving disclosure, conflicts of interest, and termination of relationships.
What You Need to Know About Laws of Agency
Laws of Agency is one of the most important and heavily tested exam topics, covering the fiduciary relationship between agents and their clients. The concept of agency is fundamental to understanding an agent's legal obligations and forms the basis for professional conduct in real estate.
The cornerstone of agency law is the six fiduciary duties, easily remembered by the acronym OLD CAR: Obedience (following lawful instructions), Loyalty (putting the client's interests first), Disclosure (revealing all material facts), Confidentiality (protecting private information), Accountability (accounting for all funds), and Reasonable Care (exercising competence and diligence). These duties apply to every client relationship.
Know how agency relationships are created: express agency (written or oral agreement), implied agency (through actions or conduct), and apparent agency (through third-party perception). Also understand how they terminate: completion, expiration, mutual agreement, death or incapacity, destruction of property, or breach. Dual agency — representing both buyer and seller — requires informed written consent from both parties and is prohibited in some states.
- Memorize OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable Care
- Know the difference between client (fiduciary duties) and customer (honesty and fairness)
- Dual agency requires informed written consent from BOTH parties
- Agency can be created unintentionally through implied or apparent agency
Sample Agency Questions
200+ in bankUnder agency law in Nevada, dual agency is:
Under South Dakota license law, which type of agency relationship exists when a broker represents only the seller in a real estate transaction?
Oregon broker Olivia is working with buyer couple Derek and Sarah. During their first meeting, Derek and Sarah ask Olivia who she represents in the transaction. Under Oregon law, when is Olivia required to provide a written agency disclosure to Derek and Sarah?
Missouri continuing education (CE) requirements for license renewal include:
Kentucky requires how many hours of pre-license education?
How is implied agency most commonly created?
Under current Illinois agency law, which of the following statements is NOT accurate?
Information about the lowest price a seller will accept is:
New Jersey continuing education requirements include:
Virginia continuing education requirements for salespersons include:
Kansas recognizes which agency relationships?
An exam-prep coach in Mooresville is sorting out a file issue involving WWREA at first substantial contact. Which statement best applies under current North Carolina law?
Maryland real estate licensees are regulated by the:
NM listing agreements must include:
Broker Jameson operates a large brokerage in Flint, Michigan. He has established a designated agency policy in his office. Salesperson Keisha represents buyer Donna, and salesperson Liam represents seller Frank, on the same property transaction. Broker Jameson is not personally involved in showing the property or drafting the offer. Which statement BEST describes Jameson's agency status in this transaction under Michigan law?
Frequently Asked Questions
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