Question 18

Death of the seller would cause the termination of a listing contract.

The death of the seller leads to the automatic termination of a listing contract, as the contract is nullified when the principal party (the seller) is no longer alive to fulfill the terms of the agreement.

A) Death of the seller

This option is correct because the death of the seller terminates the listing contract automatically. The contract is dependent on the seller's ability to participate in the transaction, and their death removes that ability, thus nullifying the contract.

B) Death of the listing salesperson

This option is incorrect as the death of the listing salesperson does not terminate the listing contract. The contract is between the seller and the brokerage, not the individual salesperson. The brokerage can appoint another salesperson to continue the listing.

C) Bankruptcy of the listing salesperson

This option is also incorrect. While the bankruptcy of a listing salesperson may affect their ability to perform, it does not terminate the listing contract itself. The brokerage remains responsible for the contract, and a new salesperson can be assigned.

D) Rejection of a counteroffer by the seller

This option is incorrect as well. A rejection of a counteroffer does not terminate the listing contract; rather, it simply means that the proposed terms were not accepted. The original listing agreement remains in effect until it is otherwise terminated.

Conclusion

The termination of a listing contract occurs specifically when the seller dies, as they are the principle party to the agreement. Other options, such as the death of the salesperson, their bankruptcy, or the rejection of a counteroffer, do not affect the validity of the listing contract, thereby making them incorrect in this context.