Humber/Ontario Real Estate Course 4 Exam Practice

How is an agency relationship created through ratification?

1. When a seller acknowledges the salesperson acted on their behalf

2. When an agency agreement is printed and signed

3. When a buyer agrees to the seller's terms

4. When the brokerage signs off on a deal

The correct answer is: When a seller acknowledges the salesperson acted on their behalf

An agency relationship through ratification is established when a seller acknowledges that a salesperson acted on their behalf, effectively affirming the actions taken by the salesperson. This process involves the seller recognizing and accepting the work the agent has done, even if there was no formal agreement prior to the agent's actions. By ratifying the agent's actions, the seller creates a binding relationship with the agent, allowing the agent to represent the seller in future negotiations and transactions. In contrast, printing and signing an agency agreement would constitute a formal agency creation at the outset rather than through ratification. Similarly, a buyer agreeing to the seller’s terms does not inherently establish an agency relationship, as this event concerns negotiation rather than representation. Lastly, while the brokerage signing off on a deal indicates approval or acknowledgement of the transaction, it does not specifically address the relationship between the agent and the principal in the context of ratification.