How does an agent typically establish their authority?

How does an agent typically establish their authority?

• A. Through verbal agreements only
• B. By written or verbal agreements
• C. By acting on behalf of the principal
• D. Through implied contracts

Answer: (B)

An agent typically establishes their authority through both written and verbal agreements, which serve as formal acknowledgment of the relationship and the specific powers granted by the principal. Written agreements, such as contracts, provide clear terms and conditions, detailing the scope of the agent's authority, responsibilities, and the obligations of both parties. This clarity is crucial in real estate transactions, where the stakes are often significant. Verbal agreements can also establish authority, particularly in less formal situations or in jurisdictions that allow for oral agreements in certain contexts. However, relying solely on verbal agreements can lead to misunderstandings or disputes about the extent of authority. Overall, the combination of these methods ensures both the agent and the principal have a clear understanding of the relationship, promoting legality and accountability. This dual approach fosters a professional standard essential in real estate practices, where established authority ultimately guides the agent's actions on behalf of the principal.

An agent typically establishes their authority through both written and verbal agreements, which serve as formal acknowledgment of the relationship and the specific powers granted by the principal. Written agreements, such as contracts, provide clear terms and conditions, detailing the scope of the agent's authority, responsibilities, and the obligations of both parties. This clarity is crucial in real estate transactions, where the stakes are often significant.

Verbal agreements can also establish authority, particularly in less formal situations or in jurisdictions that allow for oral agreements in certain contexts. However, relying solely on verbal agreements can lead to misunderstandings or disputes about the extent of authority.

Overall, the combination of these methods ensures both the agent and the principal have a clear understanding of the relationship, promoting legality and accountability. This dual approach fosters a professional standard essential in real estate practices, where established authority ultimately guides the agent's actions on behalf of the principal.