Wisconsin Real Estate Sales Practice Exam

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What are the potential remedies if an agent breaches an agency agreement?

Revocation of license
Transfer to another agent
Rescission and sue for damages
Termination of listing

The correct answer is: Rescission and sue for damages

If an agent breaches an agency agreement, one of the potential remedies is rescission and the ability to sue for damages. Rescission refers to the legal act of voiding or cancelling the contract, returning both parties to their original positions as if the contract had never existed. This is particularly relevant in agency relationships where one party has not fulfilled their obligations as defined in the agreement. In addition to rescission, suing for damages allows the harmed party to seek compensation for any losses incurred as a result of the breach. This can include financial losses, lost opportunities, and other compensatory damages that arise due to the agent not acting according to the terms of the agency agreement. The other options, such as revocation of license or transfer to another agent, may be consequences of a breach or decisions a client could consider, but they do not directly address the remedies available to the party harmed by the breach. Termination of listing is a potential action that can occur after a breach, but it does not inherently involve legal remedy through rescission or damages. Therefore, the option of rescission and suing for damages truly encapsulates the legal remedies available following a breach of agency agreement.