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Gallagher University Practice Exam

Subject 2 Practice Exam Simulation

This simulation is designed to feel as close as possible to the New York State exam style for agency law. Expect scenario-based questions, close answer choices, and repeated testing of client versus customer, fiduciary duties, dual agency consent, disclosure timing, subagency, and anti-trust rules.

20 Questions Subject 2: Law of Agency NYS Exam Style

Exam Instructions

This simulation is based on your Subject 2 outline and key terms. Select the best answer for each question, then click Score My Exam. Your results, answer key, and explanations will appear instantly below.

Total Questions20
FormatMultiple choice
ScoringInstant
Best UseSubject 2 capstone review

Interactive Subject 2 Exam

A. The Real Estate Agent

1. In an agency relationship, the principal is:

Correct answer: B. The principal is the party the agent represents. Agency analysis usually begins by identifying the principal first.
A. The Real Estate Agent

2. A buyer speaks with a listing broker, but no buyer agency has been created. The buyer is most likely the broker’s:

Correct answer: C. Without buyer agency, the buyer is generally a customer, not a client.
B. Agent as Fiduciary

3. Which fiduciary duty requires the agent to place the client’s interests above all others?

Correct answer: A. Loyalty means the agent must put the principal’s interests first.
B. Agent as Fiduciary

4. An agent tells the seller that the buyer would probably pay much more, even though the buyer’s agent was told that number in confidence. Which duty was violated?

Correct answer: D. Confidential information must be protected unless the client authorizes disclosure.
B. Misrepresentation

5. A broker knowingly tells a buyer that the basement has never leaked, even though the seller disclosed repeated flooding. This is:

Correct answer: B. A false statement about a material fact is misrepresentation and can create serious liability.
C. Agency and Brokerage

6. A salesperson in New York generally acts under the authority of:

Correct answer: A. Salespersons work through a broker and do not operate independently.
D. Creation of Agency

7. Which of the following is the clearest example of expressed agency?

Correct answer: C. A signed listing agreement is the classic example of express agency.
D. Anti-Trust

8. If competing brokerages agree that none of them will charge less than 6% commission, that is:

Correct answer: B. Agreements among competitors to set prices or commissions are illegal price fixing.
D. Anti-Trust

9. Several firms agree not to show any listings held by a discount brokerage. This is best described as:

Correct answer: D. A concerted refusal to deal is a group boycott.
D. Implied Agency

10. Agency created by conduct rather than by a written or spoken agreement is:

Correct answer: A. Implied agency arises from behavior that suggests representation.
E. Agency Alternatives

11. Which relationship exists when one broker represents both buyer and seller in the same transaction?

Correct answer: C. Dual agency exists when the same broker represents both sides.
F. Subagency

12. A subagent in a traditional cooperative sale owes fiduciary duties primarily to the:

Correct answer: B. A subagent generally owes duties to the seller through the listing broker relationship.
F. Buyer Brokerage

13. Which statement best reflects modern New York agency practice?

Correct answer: D. Modern practice includes buyer agency and other alternatives beyond older subagency models.
G. Dual Agency

14. Dual agency in New York requires:

Correct answer: A. Dual agency is permitted only with full informed consent from all affected parties.
G. Undisclosed Dual Agency

15. What is the biggest problem with undisclosed dual agency?

Correct answer: C. The central issue is hidden divided loyalty without informed consent.
H. Compensation / Regulation

16. A broker receives compensation from another party in the transaction without proper disclosure. What is the best exam concern?

Correct answer: D. Compensation from another party raises conflict and disclosure concerns, especially in agency law.
I. Agency Relationships

17. A single agency broker represents:

Correct answer: B. Single agency means one-side representation only.
K. Listing Forms

18. Under which listing agreement does the broker earn a commission no matter who finds the buyer during the listing period?

Correct answer: A. The broker earns a commission under an exclusive right-to-sell listing regardless of who produces the buyer.
L. Section 443

19. The main purpose of the agency disclosure form under Section 443 is to:

Correct answer: C. The disclosure form explains the relationship; it is not the same as a contract.
M. Signature Page

20. In New York agency disclosure practice, the “first substantive contact” is best understood as:

Correct answer: B. First substantive contact is the point where the conversation becomes agency-relevant enough that disclosure is required.

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