Question

A seller employed a broker through an authorization to sell, which included an authorization to accept deposits. Upon accepting a deposit from a potential buyer and before presenting the offer to the seller, the broker misappropriated the money. The risk of loss is

Answer 1

The risk of loss lies with the seller who employed the misappropriating broker.

Step-by-step explanation:

The risk of loss in this situation lies with the seller who employs the broker. When a seller employs a broker through an authorization to sell that includes an authorization to accept deposits, the broker acts on behalf of the seller. Therefore, any misappropriation or loss of funds by the broker would be the responsibility of the seller.