Michigan Real Estate Exam Practice Question
Agency may be terminated by which of the following?
Correct Answer: C
Rationale: Termination of agency can occur when an agent discloses a conflict of interest, as this undermines the trust essential for the agency relationship. Such disclosure may prompt the principal to reassess their agreement, leading to termination.
Option A, discovery of a major defect in the property, may affect the sale but does not directly terminate the agency relationship. Option B, payment of a cancellation fee, is not a valid reason for termination unless specified in the contract; it merely outlines a financial consequence. Option D, lack of agreement by all parties, refers to contract formation rather than termination of an existing agency.
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