California Real Estate SalespersonLaws of Agency and Fiduciary DutiesEasy
A salesperson spends several weekends driving a prospective purchaser to view homes, discusses the purchaser's financing options, and helps her draft an offer—all without ever having the purchaser sign a written buyer representation agreement. Based on this conduct, what type of agency relationship has most likely been created?
- AAn implied agency, created by the conduct and mutual consent of the parties even without a signed agreement
- BA dual agency, because the salesperson is now representing both the seller and the buyer
- CAn agency coupled with an interest, since the salesperson has invested time and effort in the buyer
- DNo agency exists because California law requires a written buyer agency agreement before any duties arise
Show answer & explanationAnswer & explanation
Correct answer: A. An implied agency, created by the conduct and mutual consent of the parties even without a signed agreement
Agency relationships in California can be created by the conduct of the parties, not just by a signed contract; when a salesperson acts as a buyer's representative and the buyer accepts that assistance, an implied agency arises. A written agreement is best practice and required to enforce a commission claim under the statute of frauds, but the agency relationship itself can exist without it.
Why the other options are wrong
- B. Incorrect—nothing in the facts indicates the salesperson also represents the seller.
- C. Incorrect—an agency coupled with an interest requires the agent to hold a financial or property interest, not just effort expended.
- D. Incorrect—agency can be implied from conduct; a writing is only required to enforce compensation claims.
Implied Agency
An agency relationship that arises from the conduct and mutual consent of the parties, even without a signed written agreement.
- Agency can be created orally or by conduct in California
- A writing is required only to enforce a claim for compensation (statute of frauds)
- Implied agency carries the same fiduciary duties as an expressly written agency
Memory trick: Actions speak louder than paperwork—conduct creates agency.