Illinois Real Estate Practice Exam

Which action does not terminate an agency relationship according to real estate practices?

1. Renunciation

2. Death of either party

3. Making an offer

4. Mutual agreement

The correct answer is: Making an offer

Making an offer does not terminate an agency relationship because it is merely a step within the ongoing process of negotiations or transactions between the parties involved. The agency relationship primarily hinges on the duties and obligations of the agent to the principal, which remain intact unless an external factor actively ends the relationship. In contrast, actions such as renunciation, where one party decides to withdraw from the agency agreement, or the death of either party, which fundamentally alters the ability to continue the relationship, both lead to the termination of that relationship. Similarly, mutual agreement between the parties to end the agency relationship also concludes it formally. However, an offer is simply a proposal and does not fulfill the criteria needed to dissolve the agency.