Free practice
Agency defined: principal, agent, third party, general and special agents
Finish →Question 1 of 40
In an agency relationship, who is the principal?
Reveal answer
Correct answer: The person whom the agent represents
The principal is the represented person. The agent acts on that person's behalf.
Question 2 of 40
Which statement best defines a general agent?
Reveal answer
Correct answer: An agent authorized for a series of transactions within a particular business or continuing activity
General agency involves continuing authority within a defined business or activity.
Question 3 of 40
Nora lists with Broker Chen. Buyer Luis uses a separate broker. In Nora's agency relationship with Chen, what is Luis?
Reveal answer
Correct answer: A third party
Luis is outside the agency relationship between Nora and Chen, making him a third party to it.
Question 4 of 40
An owner authorizes a manager to collect rents, arrange repairs, and negotiate leases throughout the operation of an apartment building. What does this best illustrate?
Reveal answer
Correct answer: General agency for the rental operation
Continuing authority over a series of rental-management transactions exemplifies general agency.
Question 5 of 40
A broker hired to find a buyer for one warehouse advertises, conducts tours, and negotiates price. Why can this still be special agency?
Reveal answer
Correct answer: The tasks serve one particular authorized undertaking
Several tasks may implement one undertaking. The scope of the assignment, not the number of tasks, determines the classification.
Question 6 of 40
In California, a broker represents a buyer only, but the seller pays the broker's compensation by agreement. Whom does that broker represent?
Reveal answer
Correct answer: The buyer
California allows a buyer's agent to receive compensation from the seller while remaining the buyer's agent.
Question 7 of 40
In California, how does a salesperson's duty to a seller compare with the duty owed that seller by the broker for whom the salesperson functions?
Reveal answer
Correct answer: It is equivalent to the broker's duty
California makes the salesperson's duty to a party equivalent to that broker's duty to the same party.
Question 8 of 40
A California seller's agent says, 'The buyer is a third party, so I need not deal honestly with the buyer.' What is the best assessment?
Reveal answer
Correct answer: Incorrect, because honest and fair dealing is owed to buyer and seller
California requires honest and fair dealing toward buyer and seller, whether or not both are represented.
Question 9 of 40
Which feature most directly distinguishes special agency from general agency?
Reveal answer
Correct answer: The scope of the authorized undertaking
Special and general agency classify the scope of authority, not payment, client side, or property type.
Question 10 of 40
A broker has an ordinary listing to find a buyer, with no additional authority to execute a sale contract. An acceptable offer arrives while the seller is traveling. What should the broker do?
Reveal answer
Correct answer: Present the offer for the seller's decision and signature
An ordinary listing does not itself authorize a broker to sign a seller's acceptance. The seller must make and execute that decision absent additional authority.
Question 11 of 40
A manager is authorized to operate an owner's rentals but not to sell them. A prospective purchaser asks the manager to sign a sale contract for the owner. Which response follows the agency limits?
Reveal answer
Correct answer: Decline to sign on the owner's behalf without sale authority
General agency within rental operations does not confer authority to sell the owner's property.
Question 12 of 40
Seller Ana and buyer Ben each have separate brokers. Which statement correctly describes their roles relative to those two agency relationships?
Reveal answer
Correct answer: Each is a principal to their own broker and a third party to the other's agency relationship
Agency roles are relational. Separate representation makes each client a principal in one relationship and a third party to the other.
Question 13 of 40
Which term identifies an agent representing both the buyer and seller in the same California real property transaction?
Reveal answer
Correct answer: Dual agent
California defines a dual agent by representation of both seller and buyer, directly or through affiliated licensees.
Question 14 of 40
A California broker proposes to represent both seller and buyer. Which condition is required for that dual agency?
Reveal answer
Correct answer: Both seller and buyer must know of and consent to the dual agency
California permits dual agency with the knowledge and consent of both seller and buyer.
Question 15 of 40
A California listing broker says the broker bears no agency responsibility because a salesperson handled every client meeting. What is the best response?
Reveal answer
Correct answer: The broker bears responsibility for the salesperson acting for the broker
California places responsibility on the broker for affiliated salespersons performing as the broker's agents.
Question 16 of 40
A buyer's broker considers a seller's offer to pay the entire brokerage fee in California. Which question best identifies whom the broker represents?
Reveal answer
Correct answer: For whom has the broker agreed to act as agent?
The representation agreement, rather than the fee source, identifies the principal. California expressly recognizes seller-paid buyer agency.
Question 17 of 40
In agency terminology, what does 'third party' mean?
Reveal answer
Correct answer: A person outside the particular agency relationship being examined
Third party describes a person's position outside a particular agency relationship, not arrival order or compensation.
Question 18 of 40
An owner hires a broker solely to locate a tenant for one vacant suite. The broker will have no ongoing management duties. Which classification best fits?
Reveal answer
Correct answer: Special agent for the leasing assignment
Locating a tenant for one suite is a particular undertaking rather than continuing management authority.
Question 19 of 40
A rental manager's authority covers collecting rents and arranging building repairs. The owner asks whether this also authorizes trading stocks in the owner's personal account. What is the best answer?
Reveal answer
Correct answer: No, because personal stock trading is outside the authorized rental activity
General agency is bounded by its authorized field. Rental operating authority does not extend to unrelated securities transactions.
Question 20 of 40
Two brokers receive assignments. One must find a buyer for a particular lot. The other must operate an owner's rental portfolio through recurring leasing and maintenance decisions. Which comparison is most accurate?
Reveal answer
Correct answer: The first illustrates special agency; the second illustrates general agency
The first assignment is a particular undertaking. The second is continuing authority within a rental business.
Question 21 of 40
Under California's agency definitions, which licensee bears responsibility for salespersons acting as agents of that licensee in a real property transaction?
Reveal answer
Correct answer: The broker for whom those salespersons function
The broker bears responsibility for salespersons and broker associates acting as agents of that broker.
Question 22 of 40
In California, a seller's agent gives a separately represented buyer truthful information about the property. Does that honest treatment by itself make the buyer the listing broker's principal?
Reveal answer
Correct answer: No; duties to a buyer do not by themselves create representation of that buyer
California imposes honest-dealing duties toward a nonprincipal buyer. Performing them does not itself create a buyer agency relationship.
Question 23 of 40
A California broker represents both buyer and seller with their knowledge and consent in one home sale. A student says the broker must be a general agent because there are two principals. Which correction is best?
Reveal answer
Correct answer: Dual agency identifies the represented sides; general agency concerns the breadth of authority
California permits consensual dual agency. Representation of both sides does not establish continuing general authority over their affairs.
Question 24 of 40
A listing engagement lasts several months and involves many showings, but the broker's assignment remains finding a buyer for one property. Which fact best supports classifying it as special agency?
Reveal answer
Correct answer: The authority remains directed to one particular undertaking
The particular undertaking controls. Duration and repeated steps do not alone convert special agency into general agency.
Question 25 of 40
Which description best captures the agent's role?
Reveal answer
Correct answer: The person acting for a principal in dealings with third parties
An agent acts on a principal's behalf in dealings with third parties. Representation does not transfer ownership to the agent.
Question 26 of 40
A buyer hires a broker to locate and negotiate the purchase of a particular parcel, with no authority over other business matters. Which description best fits that assignment?
Reveal answer
Correct answer: Special agency on behalf of the buyer
A particular purchase undertaking can be special agency. That classification is not limited to sellers' listings.
Question 27 of 40
A property owner authorizes a manager to negotiate rental leases. In a lease negotiation, which person is the principal in the owner's management agency relationship?
Reveal answer
Correct answer: The property owner
The owner is represented by the manager and is therefore the principal in that relationship.
Question 28 of 40
A management agreement calls a manager a 'general agent' but authorizes rental operations and expressly excludes property sales. What should control when deciding whether the manager may sell the building?
Reveal answer
Correct answer: The actual authorization, including the exclusion of sales
The scope of the grant controls. A general-agent label does not negate an express limitation on authority.
Question 29 of 40
In California, to whom does a seller's agent acting for the seller only owe the fiduciary duty of utmost care, integrity, honesty, and loyalty?
Reveal answer
Correct answer: The seller
California's disclosure form identifies those fiduciary duties as owed by the seller's agent to the seller, while also specifying duties to both buyer and seller.
Question 30 of 40
A California buyer's agent owes duties to a seller who is not that agent's principal. A salesperson works for that buyer's broker. Which statement about the salesperson is correct?
Reveal answer
Correct answer: The salesperson's duty to the seller is equivalent to the buyer's broker's duty to that seller
California's equivalence rule includes duties to buyers and sellers who are not principals. Compare the salesperson with the broker for whom that salesperson functions.
Question 31 of 40
A California broker uses one affiliated salesperson to work with a seller and another to work with the buyer in the same sale. Both sides are represented by that broker. Which conclusion follows?
Reveal answer
Correct answer: The broker acts as a dual agent even though different salespersons serve the two sides
California's definition of dual agent includes representation of both sides through salespersons or broker associates.
Question 32 of 40
A California buyer's broker receives part of the compensation from the buyer and part from the seller. The broker has agreed to represent the buyer only. Which conclusion is justified?
Reveal answer
Correct answer: The broker remains the buyer's agent under the stated representation arrangement
California permits seller compensation in whole or part to a buyer's agent without creating seller representation.
Question 33 of 40
Which assignment is the clearest example of general agency?
Reveal answer
Correct answer: Continuing operation of rental units, including leasing, rent collection, and repair arrangements
General agency involves continuing transactions within a business activity, as in ongoing rental management.
Question 34 of 40
A broker markets the owner's property and negotiates offers for the owner. A buyer argues that the broker must own the property because the broker controls the negotiations. Which description is correct?
Reveal answer
Correct answer: The broker remains the agent, and the represented owner remains the principal
Performing negotiations for an owner is representative activity. It does not transfer the owner's principal role to the broker.
Question 35 of 40
A broker was hired to find a buyer for one building. The owner later gives the broker continuing authority to operate the owner's rentals, collect rents, and arrange repairs. What most clearly explains the new general-agency role?
Reveal answer
Correct answer: The new authorization covers a continuing rental business activity
The expanded grant of continuing operating authority, not duration or familiarity, explains the general-agency role.
Question 36 of 40
Two agreements both call the representative a 'special agent.' One authorizes locating a buyer; the other also expressly authorizes signing a specified document for the owner. What is the best conclusion?
Reveal answer
Correct answer: The actual grants differ, so the shared label alone does not establish identical powers
The special-agent classification does not replace examining the actual authorization. A specific grant can differ between particular undertakings.
Question 37 of 40
Under California's agency disclosure law, which statement about a seller's agent is accurate?
Reveal answer
Correct answer: The agent owes fiduciary duties to the seller and honest and fair dealing to both buyer and seller
California distinguishes the seller-agent fiduciary relationship from duties of honest and fair dealing owed to both sides.
Question 38 of 40
A California broker associate works under another broker in a home sale. The associate says holding a broker license means the responsible broker has no responsibility for the associate's agency work. Which response is correct?
Reveal answer
Correct answer: The responsible broker bears responsibility for broker associates acting as agents of that broker
California includes broker associates as well as salespersons in the broker's responsibility for affiliated representatives.
Question 39 of 40
In California, a seller's broker presents a buyer's offer. The buyer has a separate broker. The seller argues that presenting the offer means the listing broker now represents the buyer too. Which analysis is best?
Reveal answer
Correct answer: Communicating with the buyer's side can carry out the seller's agency without establishing buyer representation
An agent acts for a principal in dealings with third parties. Communication with the buyer's side does not by itself establish California dual agency, which involves representation of both sides with knowledge and consent.
Question 40 of 40
An owner authorizes continuing rental management but excludes sales. A manager argues, 'I am a general agent, and this buyer would be a third party, so I may accept the buyer's offer for the owner.' Which flaw is decisive?
Reveal answer
Correct answer: Third-party status does not expand authority beyond the authorized rental activity
Identifying a third party does not supply authority to carry out an excluded transaction. General rental-management authority remains limited.
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