Question 54

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

The death of the seller results in the automatic termination of a listing contract because the contract is inherently tied to the seller's ability to convey the property. When the seller passes away, their legal capacity to engage in the contract ceases.

A) Death of the seller

This option is correct as it directly leads to the termination of a listing contract. A listing agreement is a personal contract between the seller and the agent, and upon the seller's death, the contract is no longer valid since the seller can no longer fulfill the obligations stipulated within it.

B) Death of the listing salesperson

While the death of the listing salesperson may impact the operations of the agency, it does not terminate the listing contract itself. The contract remains in effect, and the brokerage can assign another agent to continue the listing.

C) Bankruptcy of the listing salesperson

The bankruptcy of the listing salesperson does not automatically terminate the listing contract. The brokerage remains responsible for the contract, and the listing can continue under the brokerage's management, regardless of the individual agent's financial situation.

D) Rejection of a counteroffer by the seller

The rejection of a counteroffer by the seller does not terminate the listing contract. It may affect negotiations regarding the sale, but the original contract remains in place until either the seller decides to terminate it or the terms of the contract are fulfilled.

Conclusion

In summary, the death of the seller is the only situation among the options listed that leads to the automatic termination of a listing contract, as it eliminates the seller's legal capacity to execute the agreement. All other options either do not affect the validity of the contract directly or pertain to circumstances that do not terminate the agreement.