Law of Agency: RES exam practice questions

In law, agency is the relationship that arises when __________.

1. Aone person authorises another to act for him towards third parties
2. Btwo or more persons carry on a business in common with a view to profit
3. Cone person holds property for the benefit of another under a trust
4. Done person agrees to work under another’s direction and control in return for a salary

A real estate salesperson does estate agency work __________.

1. Afor and on behalf of the estate agent he is registered with
2. Bin his own name as an independent principal
3. Con behalf of CEA, which registers him
4. Dfor both the buyer and the seller in each transaction he handles

Authority that a principal gives to his agent orally or in writing, stating what the agent may do, is called __________.

1. Aexpress authority
2. Bimplied authority
3. Capparent authority
4. Dauthority by ratification

Ratification means that __________.

1. Aa principal adopts an act done without his authority, which is then treated as authorised from the time it was done
2. Ba principal adopts an act done without his authority, which is then treated as authorised from the date of adoption
3. Can agent confirms to a third party that he has his principal’s authority
4. Da court orders a principal to honour a contract made by his agent

A salesperson appointed to find a buyer does so, and the sale is completed. The agency ends by __________.

1. Aperformance
2. Bfrustration
3. Crevocation
4. Dmutual agreement

Under a prescribed estate agency agreement that allows co-broking, the co-broking agent’s commission is __________.

1. Ashared out of the estate agent’s commission; the client pays the co-broking agent nothing
2. Bpaid by the client in addition to the estate agent’s commission
3. Cpaid by the client, with the estate agent’s commission reduced by the same amount
4. Dfixed by CEA as half of the estate agent’s commission, whatever the agents agree

Farah Rahim, 34, a salesperson with a mid-sized estate agency, was appointed by Mr Lim Boon Hock, a 61-year-old retiree, under a prescribed Form 1 to sell his three-bedroom Sengkang condominium unit so that he could move in with his daughter in Punggol. After three weeks of viewings, Farah persuaded Mr Lim to accept an offer of $1.18 million from a young couple, Mr and Mrs Nathan Pillai, slightly above the bank’s valuation. Once the couple had exercised the option, they handed Farah a red packet containing $2,000 ‘for all your help’, explaining that it was a family custom at festive seasons. Farah kept the money and said nothing to Mr Lim, reasoning that the sale was already binding and that he had obtained a good price.

Which of the following BEST describes Farah’s position?

1. AShe has breached her duty to Mr Lim, as a benefit from the buyers arising from her position is a secret profit she must account for, whatever the price obtained.
2. BShe has acted properly, as the red packet was handed over only after the option had been exercised and the sale had already become binding on Mr Lim.
3. CShe has acted properly, provided she declares the $2,000 as income and her estate agent records it as part of the commission earned on the sale.
4. DShe has breached her duty only if Mr Lim can show that he accepted a lower price than he otherwise would have because of her dealings with the buyers.

Mdm Tay Bee Choo, 66, appointed Horizon Realty under a prescribed exclusive agreement (Form 5) to sell her condominium unit in Toa Payoh, as she planned to move into a smaller flat near her sister. The agreement ran from Thursday, 1 January 2026 to Tuesday, 31 March 2026 and fixed the commission at 2%. In February, Horizon’s salesperson brought Mr and Mrs Daniel Ho to view the unit, but they felt the price was too high. The agreement expired without a sale and Mdm Tay, unhappy with Horizon’s marketing, listed the unit with another agency. On Sunday, 10 May 2026, she granted an option to the Hos, who had returned through the new agency, and they exercised it two weeks later. The new agency tells her that Horizon ‘has no claim because its agreement is dead’.

Is Mdm Tay liable to pay commission to Horizon Realty?

1. AYes, as the unit was sold within 3 calendar months after expiry to buyers whom Horizon had introduced during the validity period of the agreement.
2. BNo, as the exclusive agreement had already expired before the sale, and an expired agreement cannot give rise to any liability for commission.
3. CNo, as the Hos came back through another agency, which became the effective cause of the sale and so is the only agency owed commission.
4. DYes, as any sale within 6 calendar months after an exclusive agreement expires attracts commission to that agency, whoever introduced the buyer.

For eleven years, Mdm Lee Poh Choo, 70, left the management of her three Jalan Besar shophouses to her property manager, Rajesh Kumar, who routinely signed tenancy renewals with the tenants ‘for and on behalf of Mdm Lee’, and she honoured every one of them. In June 2026 she dismissed Rajesh after a quarrel over his fees and asked her nephew to take over, but she did not tell any of the tenants. In July, Rajesh, who still had the files, signed a one-year renewal at the existing rent with the tenant of one shophouse, a family-run bakery that had only ever dealt with him. Mdm Lee, who had hoped to raise the rent by 10%, says she cannot be bound by anything Rajesh signed after he was dismissed.

Which of the following statements is LEAST accurate?

1. AMdm Lee is bound by the renewal, as Rajesh’s implied authority from their past dealings lasted until the tenants learnt of his dismissal.
2. BMdm Lee is bound by the renewal, as her years of conduct represented Rajesh as her agent and the bakery relied on that representation.
3. CRajesh’s actual authority, whether express or implied, came to an end when Mdm Lee dismissed him in June 2026, whatever the tenants knew.
4. DMdm Lee could have avoided being bound by promptly notifying the tenants who had dealt with Rajesh that his authority had ended.

Kevin Ong, 45, the operations manager of Brightwell Furnishings Pte Ltd, was authorised by the board to lease a showroom for the company. On Tuesday, 3 March 2026 he signed a three-year lease of a Kallang Bahru showroom at $9,500 a month ‘for and on behalf of Brightwell Furnishings Pte Ltd’, within the limits the board had set. Kevin owns a 5% stake in the company and has personally guaranteed its bank overdraft, and the landlord knew him well from their national service days. Later in the year, the company fell into arrears. The landlord, noting that Kevin’s is the only signature on the lease and that the company’s bank account is nearly empty, wants to sue Kevin personally for the unpaid rent.

Against whom can the landlord enforce the lease?

1. AAgainst Brightwell Furnishings Pte Ltd, the disclosed principal, as Kevin signed within his authority and is not a party to the lease.
2. BAgainst Kevin personally, as he is the only person who signed the lease and his signature alone makes him a party to it.
3. CAgainst Kevin and Brightwell Furnishings Pte Ltd jointly, as both an agent and his disclosed principal are liable on the contract.
4. DAgainst Kevin personally, unless Brightwell Furnishings Pte Ltd ratifies the lease after learning that he signed it for the company.