Agency Relationships and Fiduciary Duties
Agency questions test how agency is created, who is represented, what fiduciary duties apply, and when agency terminates.
How to study for the California salesperson exam
Treat each item as a broker-practice problem: classify the property issue, identify the parties and duties, then apply California disclosure and contract rules.
Core concepts
Concept 1
A California licensee must know whether the party is a client, customer, principal, or third party.
Exam cue: Name the principal before choosing the duty.
Concept 2
Fiduciary duties include loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.
Exam cue: Unlawful client instructions are never protected by obedience.
Concept 3
Agency can arise by agreement and ends through performance, expiration, mutual agreement, revocation, or other legal events.
Exam cue: Termination of agency does not automatically erase all confidentiality duties.
Risk pitfalls and guardrails
Giving fiduciary duties to every consumer equally.
Guardrail: Avoid answers that hide material facts, ignore broker supervision, confuse document types, or let custom override California law.
Letting a client instruction override law or disclosure duties.
Guardrail: Avoid answers that hide material facts, ignore broker supervision, confuse document types, or let custom override California law.
Confusing commission entitlement with agency creation.
Guardrail: Avoid answers that hide material facts, ignore broker supervision, confuse document types, or let custom override California law.
Memory anchors
OLD CAR
Obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care are core fiduciary duties.
Principal
The principal is the person represented by the agent.
Customer
A customer is not owed the same fiduciary duties as a client.
Actual Authority
Actual authority is intentionally granted to an agent.
Ostensible Authority
Ostensible authority appears to exist because of the principal's conduct.
Dual Agency
Dual agency requires informed consent because one agent represents both sides.
Agency Termination
Agency can end by performance, expiration, agreement, revocation, death, or incapacity.
Accounting
Accounting requires careful handling of money, documents, and property.
Loyalty
Loyalty requires placing the principal's interests above the agent's self-interest.
Reasonable Care
Reasonable care requires competence, diligence, and skill in brokerage work.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A homeowner signs a listing employing a broker to sell the home. In that relationship, the homeowner is the:
A broker represents a buyer, while the seller has separate representation. What is the seller to the buyer's broker?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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