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Mutual Agreement (Rescission) 

If a principal and an agent mutually agree to form an agency contract, they can mutually agree to terminate the contract. This is called rescission.

Expiration Date

All listing agreements must have an expiration date. When that date is reached, the principal and agent have mutually agreed in advance that the listing agreement is over.


Fulfillment of the Purpose 

If the goal of the agreement is reached, the agent has Tendered Performance. The agent has completed his/her requirement under the agreement.

Revocation by the Principal

The principal can unilaterally (one-sided) revoke the agent’s authority to represent the principal. This can be done if no injury is caused to parties.

Broker Costs

If the broker has spent advertising money and is actively seeking a sale, the seller/principal may have to pay damages for breach of contract to the broker.

Broker Coupled with an Interest

If a listing agreement is an “agency coupled with an interest, the seller/principal cannot unilaterally terminate the listing agreement. The seller is obligated until expiration date of agreement.

Termination by force of law

Destruction of the Property

Death of a Principal

Broker Bankruptcy



Negligent Misrepresentation

When a salesperson should have known something but didn’t.


  • You know your client wants to use the garage as a hair salon. You sell her the property without researching the fact that the neighborhood is not zoned for home based business’.
  • You tell a buyer how wonderful the fire in the fireplace will be.  The fireplace is actually a fake fireplace front.


The person selling the property didn’t have the Covenant of SEISIN.  They didn’t seize the property. 

Meaning, they did not own the property at all.  FRAUD

Mistake of Fact / Non-Facts

A statement like, “this farm has the best tasting water well I have ever tasted”.  Upon inspection, the water well os tainted and can never be utilized.

Not telling a buyer that a freeway will be built 100 yards from the backyard.

Agent’s lack of authority

The agent didn’t have a legal listing or a buyer’s agreement.  

Fundamental breaches / Discharge by breach

An actual breach occurs when one person refuses to fulfill their side of the bargain on the due date or performs incompletely. An anticipatory breach occurs when one party announces that he intends not to meet his side of the deal in advance of the due date for performance.

Pre-contractual misrepresentations

The property was not what was held out/advertised by the agent.

Renunciation / Refusal to perform

One of the parties to the contract backed out of the deal.

Inequality of bargaining power

Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain (bargaining power), contract or agreement, has more and better alternatives than the other party.

Always advertise that you are a licensed real estate agent.  Give notice to the other party so they can get equal representation.

Duress and undue influence

Entering a contract under pressure.  being forced to enter a contract.



Although not illegal, be careful.

Puffing is an exaggerated statement.

This is the best house in the best neighborhood.  The buyer knows of nicer houses and nicer neighborhoods but he buys it anyways.