Texas Crammer Practice Exam

What is a potential consequence for a seller if they try to cancel a real estate listing agreement before its expiration?

1. No consequences

2. Legal action from the agent

3. Potential recourse against them

4. Immediate listing termination without penalty

The correct answer is: Potential recourse against them

When a seller attempts to cancel a real estate listing agreement before its expiration, a potential consequence is that they may face legal action or other ramifications from the agent. This is because listing agreements are contracts, and both parties are bound by the agreement's terms. If the seller unilaterally decides to terminate the agreement, the agent may seek damages or enforcement of the contract if they can demonstrate that they have fulfilled their obligations or have incurred expenses related to marketing the property. Furthermore, the agent could argue that their right to earn a commission remains intact if they can secure a buyer during the listing period. The potential recourse could range from monetary damages to the agent holding the seller accountable to the terms agreed upon. Canceling a listing without just cause or a mutual agreement typically leads to complications due to the legal implications surrounding breach of contract. This highlights the importance for sellers to understand the terms and conditions outlined in the listing agreement before making any decisions regarding its cancellation.