23. In a jurisdiction where the common law of agency governs, when does the agency relationship between a seller and a listing broker end
Answer: D
The agency relationship between a seller and a listing broker ends when the transaction has occurred as specified in the listing agreement.
The agency relationship concludes when the transaction outlined in the listing agreement is completed. This means that the broker's obligations to the seller cease once the sale is finalized according to the terms agreed upon.
A) agency never expires
This option is incorrect because agency relationships are not indefinite. They are typically defined by specific terms and conditions, including the completion of a transaction or the expiration of the listing agreement, which can lead to the dissolution of the agency.
B) when all closing documents have been signed
While signing closing documents is a significant step in the transaction process, it is not the definitive end of the agency relationship. The agency may still exist until the transaction is fully executed as outlined in the listing agreement, which may include additional steps beyond just signing documents.
C) when the deed or mortgage is signed and recorded
This option is also incorrect because the signing and recording of the deed or mortgage are part of the transaction completion process but do not necessarily signify the end of the agency relationship. The agency relationship may still persist until the transaction is fully concluded in accordance with the listing agreement.
D) when transaction has occurred as specified in the listing agreement
This is the correct answer as it accurately reflects the conclusion of the agency relationship. The agency ends when the terms of the listing agreement have been fulfilled, which typically aligns with the completion of the sale or transaction.
Conclusion
The correct answer is D because it directly correlates with the conditions under which the agency relationship is intended to terminate, as specified in the listing agreement. Options A, B, and C all fail to recognize the contractual nature of the agency relationship, which is contingent on the completion of the transaction defined in the listing agreement.