In an agency relationship, who is the party that authorizes the agent to act on their behalf?

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Study for the Burk Baker National Test. Use flashcards and multiple choice questions with hints and explanations to prepare effectively. Get ready for your exam!

Multiple Choice

In an agency relationship, who is the party that authorizes the agent to act on their behalf?

Explanation:
The principal. In an agency relationship, the person who hires the agent grants authority for the agent to act on their behalf, typically through an agency agreement like a listing or buyer representation. The agent then works under the principal’s direction and owes fiduciary duties to the principal. The broker or sales associate may facilitate the relationship, and the customer is someone being served by the agent, but they are not the one who authorizes the agent to act.

The principal. In an agency relationship, the person who hires the agent grants authority for the agent to act on their behalf, typically through an agency agreement like a listing or buyer representation. The agent then works under the principal’s direction and owes fiduciary duties to the principal. The broker or sales associate may facilitate the relationship, and the customer is someone being served by the agent, but they are not the one who authorizes the agent to act.

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