Difficulty: Hard

Average Score: 25%

A licensee has a 90-day exclusive agency agreement. The seller dies. The agency:

Rationale

A licensee's exclusive agency agreement automatically terminates upon the seller's death.

When a seller in an exclusive agency agreement dies, the contract is no longer enforceable. The legal principle is that a contract involving personal services cannot continue if one party passes away, hence the agreement terminates automatically.

A (automatically terminates.) CORRECT

The death of the seller leads to an automatic termination of the exclusive agency agreement because it is a personal contract. Since the seller is no longer alive to fulfill the obligations of the agreement, the contract cannot be enforced and thus ends instantly.

B (continues with the seller's heirs.) YOUR ANSWER

While heirs may inherit the property, they do not automatically inherit the contractual obligations of the exclusive agency agreement. The personal nature of the agreement means it cannot continue without the original party, thus it does not transfer to the heirs.

C (continues until the property is sold.) YOUR ANSWER

The idea that the agreement could continue until the property is sold is incorrect because the seller's death voids the contract. An exclusive agency agreement requires the active participation of the seller, which is no longer possible after their death.

D (continues until the estate is settled.) YOUR ANSWER

The continuation of the agreement until the estate is settled is also incorrect. The death of the seller nullifies the contractual agreement, regardless of the estate's status, as it is a personal service contract that cannot be upheld posthumously.

Conclusion

In summary, a licensee's exclusive agency agreement is inherently tied to the seller's life. Upon the seller's death, the contract automatically terminates, as personal service agreements are nullified by the death of one party. This legal principle ensures clarity in real estate transactions and protects the interests of all parties involved.

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