Texas Real Estate Sales Agent ExamContractsMedium
A real estate agent is preparing a listing agreement for a seller who is selling their primary residence. The seller is concerned about potential liability if a prospective buyer is injured on the property during a showing. Which clause in the listing agreement would typically protect the agent from such claims?
- AAutomatic Extension Clause
- BArbitration Clause
- CBroker Protection Clause
- DIndemnification Clause
Show answer & explanationAnswer & explanation
Correct answer: D. Indemnification Clause
An Indemnification Clause in a listing agreement states that the seller will hold the broker harmless from any claims, losses, or damages incurred due to the seller's actions or conditions of the property. This protects the agent from liability for injuries on the seller's property.
Why the other options are wrong
- A. An Automatic Extension Clause extends the listing agreement automatically under certain conditions, which is unrelated to liability protection.
- B. An Arbitration Clause dictates how disputes will be resolved, not liability for injuries.
- C. A Broker Protection Clause (or safety clause) protects the broker's commission after the listing expires, not from liability for injuries.
Indemnification Clause (Listing Agreement)
A provision in a listing agreement where the seller agrees to protect the broker from any claims, losses, or damages that may arise from the listing or sale of the property.
- Protects the agent from liability due to property conditions or seller actions.
- Commonly used to cover issues like injuries on the property or misrepresentations by the seller.
- Shifts risk from the agent to the seller.
Memory trick: Indemnify Injuries, Insure Integrity.