Texas Real Estate Sales Agent ExamContractsHard
A real estate agent is preparing a listing agreement for a seller who is selling their primary residence. The seller wants to ensure they are protected from potential liability if a buyer is injured on the property during a showing. Which clause should the agent ensure is included in the listing agreement to address this concern?
- AAn 'arbitration' clause
- BA 'waiver of subrogation' clause
- CA 'force majeure' clause
- DA 'hold harmless' clause
Show answer & explanationAnswer & explanation
Correct answer: D. A 'hold harmless' clause
A 'hold harmless' clause, also known as an indemnification clause, in a listing agreement typically states that the seller will not be held liable for injuries or damages that occur on the property during showings, shifting that responsibility to the broker or buyer's agent, or simply protecting the seller from liability for actions of others.
Why the other options are wrong
- A. An 'arbitration' clause dictates how disputes will be resolved, not who is liable for injuries.
- B. A 'waiver of subrogation' clause prevents an insurer from seeking reimbursement from a negligent third party, which is related to insurance, but not direct liability protection for the seller from a visitor's injury.
- C. A 'force majeure' clause addresses unforeseen circumstances that prevent contract fulfillment, not liability for injuries.
Hold Harmless Clause (Listing Agreement)
A contractual provision in which one party (often the broker) agrees to protect another party (the seller) from liability for specified damages or claims related to the property or activities, such as injuries during showings.
- Protects a party from liability
- Commonly used in listing agreements
- Shifts risk or responsibility
Memory trick: Hold Harmless: Keep me safe, don't blame me for harm.