Difficulty: Easy

Average Score: 100%

A listing contract has expired with no offers received. The agency relationship between the seller and the listing broker

Rationale

Terminates automatically upon expiration of the listing.

Once a listing contract expires, the agency relationship between the seller and the listing broker concludes automatically, as there is no longer a valid agreement in place to maintain the relationship.

A (may continue indefinitely if the seller and the broker agree to this orally.) YOUR ANSWER

While oral agreements can exist, they do not apply in the case of an expired listing contract. The formal agency relationship is based on the signed contract, which, once expired, cannot be extended indefinitely through verbal agreements, as this would lead to legal ambiguities.

B (may continue until the broker provides a written notice of termination.) YOUR ANSWER

The agency relationship does not require a written notice of termination upon expiration; it terminates automatically. A written notice is unnecessary because the expiration itself serves as the definitive end of the agency relationship, rendering any further notice irrelevant.

C (was never legally binding since no licensed activity was performed.) YOUR ANSWER

This choice misrepresents the nature of a listing contract. A listing agreement is legally binding as long as it has been executed properly, regardless of whether offers were received. The absence of offers does not invalidate the initial binding contract.

D (terminates automatically upon expiration of the listing.) CORRECT

This statement accurately reflects the legal principle governing listing contracts. Once the specified time frame in the contract has lapsed, the agency relationship ceases without the need for additional action from either party.

Conclusion

In conclusion, the agency relationship established by a listing contract automatically ends when the contract expires, regardless of whether offers were received. This ensures clarity and protects both the seller and the broker from ongoing obligations without a valid agreement. Understanding this principle is crucial for both real estate professionals and clients to navigate their contractual rights effectively.

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