Question 85

The agency automatically terminates upon the seller's death.

When a seller with an exclusive agency agreement dies, the agency automatically terminates, as the agreement is inherently tied to the seller's personal capacity to contract.

A) automatically terminates.

This option is correct because the death of the seller nullifies the agency agreement. An exclusive agency agreement requires the seller to be alive to fulfill the terms, and upon their death, the contract is no longer valid.

B) continues with the seller's heirs.

This option is incorrect as the exclusive agency agreement does not automatically transfer to the heirs. The agreement is dependent on the seller's personal involvement and cannot be enforced by the heirs without a new contract.

C) continues until the property is sold.

This option is incorrect because the death of the seller results in the immediate termination of the agreement, irrespective of whether the property is sold or not. The seller's death precludes any continuation of the agency.

D) continues until the estate is settled.

This option is also incorrect. The agency agreement does not persist until the estate is settled; it terminates upon the seller's death. The settlement of the estate is a separate legal matter that does not affect the status of the agency agreement.

Conclusion

The correct answer, that the agency automatically terminates, is definitively right because the nature of the exclusive agency agreement is fundamentally personal to the seller. All other options fail as they suggest a continuation of the agreement post-death, which is not legally permissible.