TREC Law of Agency Practice Exam 2025 – Complete Test Prep

For an agent to be compensated according to their contract, it is essential that there is an agreement on the terms of service between the agent and the principal. This agreement typically outlines the specific duties, responsibilities, and the compensation structure that the agent will receive upon fulfilling their obligations. Having a clear and well-defined contract ensures that both parties understand the expectations and compensation involved, and it serves as a legal foundation for the agent to receive payment for their services.

In this context, while ethical expectations and recommended practices are important for maintaining professionalism in real estate and agency relationships, they do not directly influence the contractual obligation for compensation. Likewise, formal recognition by a third party may play a role in certain scenarios but is not necessary for the basic requirement of compensation under the terms of an agreement made between the agent and the principal.