Oregon 30-Hour Real Estate Law Practice Test

Which body of law governs the relationship between a real estate professional and the client they represent?

1. Contract law

2. Law of agency

3. Property law

4. Commercial law

The correct answer is: Law of agency

The law of agency governs the relationship between a real estate professional and the client they represent. This body of law establishes the framework for how agents act on behalf of their clients, outlining the obligations and responsibilities involved in such relationships. In the context of real estate, agency law is crucial because it defines the duties that an agent has toward their client, including loyalty, disclosure, and acting in the client's best interest. For instance, an agent must communicate all relevant information, avoid conflicts of interest, and uphold confidentiality. While contract law is important in defining the specific terms of agreements between parties and property law covers rights related to property ownership and use, these areas do not specifically dictate the professional relationship and the fiduciary duties that exist between an agent and their client. Commercial law deals with the rights and duties of businesses, which, while related to real estate transactions, does not specifically outline the agent-client relationship. Therefore, the law of agency is the most directly applicable body of law in this context.