Georgia Real Estate Salesperson Practice Exam

When can an implied agency relationship be established?

1. Only through a written agreement

2. When one party receives benefits without an agreement

3. When the parties act as if there is a contract

4. Upon completion of a transaction

The correct answer is: When the parties act as if there is a contract

An implied agency relationship can be established when the parties act as if there is a contract, even in the absence of a formal written agreement. This can occur through the behavior and interactions of the parties involved in a real estate transaction. For example, if one party consistently provides services or conducts business in a manner that suggests they have accepted responsibilities typically associated with an agency relationship (such as providing advice, negotiating offers, or acting on behalf of another party), it can create an implied agreement despite the lack of explicit terms. This type of relationship does not require a formal written contract; instead, it relies on the conduct and actions of the parties. The key factor is that the actions reflect an intention to enter into an agency relationship, demonstrating that the parties understood and accepted the implications of their behaviors. It is important to note that implied agency can lead to potential misunderstandings or disputes, as the expectations of the parties may not be clearly defined. Other choices, like establishing a relationship only through a written agreement or upon the completion of a transaction, emphasize formalized conditions that do not account for the nuances of behavior and communication that can create implied agreements. The option about benefits being received without an agreement does not capture the essence of mutual acknowledgment necessary for an implied agency