Under what circumstance can a broker execute a contract on behalf of a principal?

The ability of a broker to execute a contract on behalf of a principal is fundamentally based on their authority to do so. Being appointed as an attorney-in-fact, or having a Power of Attorney (POA), provides the broker with the legal authority to act on behalf of the principal in specific matters, including executing contracts. This designation is a formal arrangement in which the principal grants their agent the power to make decisions or take actions on their behalf, ensuring that any contract executed will have legal validity.

When a broker is designated as an attorney-in-fact, they are entrusted with the responsibility to act in the best interests of the principal, following the instructions and within the limits established by the Power of Attorney. This legal empowerment separates the role of an attorney-in-fact from other situations, where a broker may not have such authority to act unilaterally.

The other circumstances presented do not inherently provide the necessary authority for a broker to execute contracts. Proximity to the principal does not confer legal power, nor does the inability to contact the principal justify unilateral action. Similarly, having a property under contract doesn’t grant additional authority to execute new contracts unless specified by the current agreement or by proper authorization from the principal. Hence, having the designation