25. A licensee has signed a 90-day exclusive agency agreement with a seller. Upon the death of the seller, which of the following is true of the licensee's agency?
Answer: A
The agency agreement automatically terminates.
When the seller passes away, the exclusive agency agreement is automatically terminated due to the death of the principal party involved in the contract.
A) The agency agreement automatically terminates.
This option is correct because agency agreements are personal contracts, meaning they are contingent on the lifespan of the principal. Upon the death of the seller, the licensee can no longer represent the seller, and thus the agreement ends.
B) The agency continues with the seller's heirs.
This option is incorrect. An exclusive agency agreement does not automatically transfer to the seller's heirs upon the seller's death. The heirs may need to establish a new agreement if they wish to continue the agency relationship.
C) The agency continues until the property is sold.
This option is also incorrect. The agency does not persist until the property is sold when the principal has died. The death of the seller nullifies the agreement, regardless of the status of the property sale.
D) The agency continues until the seller's estate is settled.
This option is not valid. The agency agreement is terminated immediately upon the seller's death, and thus it does not remain in effect until the estate is settled.
Conclusion
The correct answer is A, as the agency agreement is inherently linked to the seller's life. The other options fail to recognize that the death of the seller leads to an immediate termination of the agency, removing any continuation of the agreement with heirs or until the estate is settled.