What is the term for a situation where a false statement creates an agency relationship?

Study for the 75 Hour Broker Pre Licensing Test. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

The term that pertains to a situation where a false statement creates an agency relationship is known as estoppel. In this legal context, estoppel prevents a party from denying the truth of a statement or claim that another party has relied upon, leading to an implication of an agency relationship. This can occur when a principal's actions or omissions lead a third party to reasonably believe that a particular agency relationship exists.

In situations where someone acts in a way that suggests they have given authority to another person, even if that authority was not explicitly granted, estoppel can establish that agency relationship. This principle protects the interests of third parties who rely on the misleading appearance created by a principal's conduct.

Other terms listed, such as eviction, estoppel certificate, and agency by agreement, do not pertain directly to the creation of agency relationships through false statements. Eviction refers to the removal of a tenant from rental property, and an estoppel certificate is a document used in real estate that provides confirmation of the terms of a lease. Agency by agreement refers to situations where an agency relationship is established through explicit consent or contractual agreement between the parties involved. Thus, the context of the question focuses specifically on the false representation aspect, making estoppel the most appropriate term.

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