Question 15

The agency relationship terminates automatically upon expiration of the listing.

Once a listing contract expires without any offers received, the agency relationship between the seller and the listing broker terminates automatically.

A) may continue indefinitely if the seller and the broker agree to this orally.

This option is incorrect because the agency relationship does not continue indefinitely without a valid contract in place. Oral agreements may not provide the necessary legal framework to extend the agency relationship beyond the original contract's expiration.

B) may continue until the broker provides a written notice of termination.

This option is also incorrect. The agency relationship does not require a written notice of termination to end; it automatically terminates upon the expiration of the listing contract, regardless of whether any notice is given.

C) was never legally binding since no licensed activity was performed.

This statement is incorrect as well. The listing contract is a legally binding agreement that exists until it expires, regardless of whether offers were received or licensed activity was performed. The contract's expiration brings the agency relationship to a close.

D) terminates automatically upon expiration of the listing.

This option is correct. The agency relationship between the seller and the listing broker concludes automatically when the listing contract expires, reflecting the standard practice in real estate transactions.

Conclusion

The correct answer, D, accurately reflects the legal principles governing listing contracts, where the agency relationship ceases automatically with expiration. Options A, B, and C fail to recognize the automatic termination process, emphasizing the importance of understanding the contractual obligations within real estate agreements.