Ida hires Jim,a real estate broker,to act as her agent to sell her land for $100,000.Oil is discovered beneath the land,causing its market value to in?crease one hundred-fold.The agency agreement is likely

Question

Quizplus · Accepted Answer

The discovery of oil beneath the land fundamentally changes the subject matter of the agency agreement between Ida and Jim. As a result, the agreement is terminated by operation of law. The fact that Ida initially hired Jim to sell the land does not extend to the sale of oil rights, which is now the primary value of the property. Neither additional consideration nor Jim's failure to mention the oil to prospective buyers would change this outcome.

Ida Hires Jim,a Real Estate Broker,to Act as Her Agent