Champions Law of Agency Practice Test 2025 - Free Law of Agency Practice Questions and Study Guide

The correct choice highlights a critical aspect of agency law regarding misrepresentation. An agent is not held liable for misrepresentation or concealment of material facts if they were not aware of the falsity of the information provided. This principle reflects the idea that liability is tied to knowledge and intent—if an agent genuinely believes that the information they are relaying is true, they cannot be held accountable for misrepresentation.

In agency practice, agents often rely on information provided by clients, third parties, or other sources. If they receive information in good faith and have no reason to suspect its inaccuracy, they are shielded from liability. This underscores the importance of the agent's state of mind at the time of the transaction, which plays a crucial role in determining their legal responsibilities.

The other options emphasize situations where there may be a lack of protection for the agent. For instance, if a licensee is aware of the terms in question or has disclosed all available information, they could potentially be held liable for misrepresentation. Receiving information from a third party does not inherently absolve the agent of responsibility unless they were unaware of the falsehood of that information.