Question

Which of the following is true?

1) All agency agreements must be in writing
2) Since agency is a contract, there must be consideration
3) A salesperson cannot create an agency relationship for his broker
4) None of the above

Answer 1

None of the above is true.

Step-by-step explanation:

None of the above is the correct answer. Let's break down each statement:

1. Not all agency agreements need to be in writing. While some types of agreements may require written documentation, such as real estate agency agreements, oral agency agreements can also be legally binding.
2. Consideration is not always necessary for an agency relationship. In certain cases, agency relationships can be created without a formal contract or exchange of consideration, such as when an agent acts in the best interest of the principal without expecting any compensation in return.
3. A salesperson can create an agency relationship for his or her broker. This is known as the principle of implied authority. If the salesperson is acting within the scope of their employment and carrying out duties on behalf of the broker, they can create an agency relationship.

Therefore, statement 4) None of the above is true.