What is the correct answer to: When can agents sign for principals?

The correct answer is Only with written authority. Option C is correct because Texas law, consistent with the Statute of Frauds (Texas Business & Commerce Code §26.01), requires that an agent's authority to sign real property documents on behalf of a principal must be granted in writing — typically through a written power of attorney or a specific written authorization. Verbal authority alone is legally insufficient to bind a principal to a real estate contract in Texas. This written authority requirement ensures that the scope of the agent's power is clearly defined and provable in court.

What background knowledge is needed for this Agency question?

The Statute of Frauds traces its origins to the English Statute of Frauds of 1677, enacted to prevent perjury and fraud in property disputes by requiring written evidence of significant legal agreements. Texas adopted its own version through the Business & Commerce Code, specifically §26.01, which lists real estate contracts among the agreements that must be in writing to be enforceable. Over centuries of case law, courts have consistently extended this writing requirement to the authority granted to agents, recognizing that allowing oral authority would create an easy avenue for fraud. The power of attorney became the standard legal instrument for granting written signing authority to agents in real estate transactions.

What is a good way to remember the answer to this Agency question?

Remember 'Write to Sign' — you must have something Written before you can Sign for someone else in real estate. Visualize a pen that only works when it touches paper that already has a written authorization on it; without the written document beneath it, the pen produces no legal ink. This image reinforces that verbal permission is invisible and therefore legally powerless in Texas real estate. Remember this acronym to recall that signatures must be in Written form for Only Required Documents in real estate transactions.

What exam tip applies to this Agency question?

Texas exam questions about signing authority almost always hinge on the written versus verbal distinction — when you see 'verbal authority' as an option, eliminate it immediately for any question involving real property signatures. Focus on the phrase 'written authority' and connect it mentally to the Statute of Frauds, which is the foundational legal principle the question is testing.

How does this Agency concept apply in real world practice?

A Texas investor living in New York wants to purchase a commercial property in Dallas but cannot attend the closing. She executes a durable power of attorney in favor of her business partner, specifically authorizing him to sign all closing documents on her behalf. The title company reviews the written power of attorney, confirms it meets Texas legal requirements, and allows the partner to sign the deed and loan documents as the investor's authorized agent. Without that written document, the title company would refuse to proceed, and any signature the partner provided would be legally void and unenforceable against the investor.

AgencyStandards_of_conductMEDIUM

When can agents sign for principals?

Correct Answer

C) Only with written authority

Agents can only sign on behalf of principals with written authorization.

Answer Options

Never

With verbal authority

Only with written authority

Not unless principal is their broker

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Related Concepts

Fiduciary Duty

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.

Gratuitous Agency

An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.

Implied Agency

An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.

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When can agents sign for principals?

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