Contracts and Agency
Contracts and Agency
This domain tests contract formation and the brokerage relationship rules in Georgia. The key statute for agency is the Brokerage Relationships in Real Estate Transactions Act (BRRETA), O.C.G.A. § 10-6A-1 et seq.; contract formation is governed by general Georgia contract law, including the Statute of Frauds, O.C.G.A. § 13-5-30.
Contract essentials
A real estate sale contract needs offer, acceptance, consideration, capacity, and lawful purpose. Because it transfers an interest in land, it must be in writing and signed by the party to be charged. Earnest money evidences the buyer's seriousness and is applied to the purchase price; the mutual promises are the consideration. Contingencies-financing, appraisal, inspection, sale of the buyer's home-must be clear, and deadlines matter because time is often of the essence.
BRRETA agency
A licensee represents a client only under a written brokerage engagement agreement. Clients receive loyalty, confidentiality, reasonable care, disclosure of material facts, and accounting. Customers-parties the broker does not represent-receive honesty and disclosure of adverse material facts, but not loyalty or confidentiality. Dual agency requires the informed written consent of both parties. Designated agency lets the broker assign different licensees to each side; a transaction broker assists both parties without representing either.
Disclosures
Georgia follows caveat emptor in many residential sales, but a licensee may not misrepresent known material defects. Agency status should be disclosed early so a buyer knows whether the agent represents the buyer or the seller.
Worked example
A buyer calls the listing agent and says, I will pay $20,000 over list, but do not tell the seller I can go higher. The listing agent has no written engagement with the buyer and represents the seller. The buyer's statement is not confidential to the agent's client; the agent must not mislead the buyer, but owes loyalty to the seller. If the agent wants to represent both, both parties must consent in writing to dual agency. Otherwise the agent remains the seller's agent and should tell the buyer that.
Traps
Treating an oral you are my agent as enough; calling a customer a client; using a dual-agent consent that is not written; assuming confidentiality runs to an unrepresented buyer; ignoring contract deadlines.