In an exclusive agency contract, what limitation is placed on the principal?

In an exclusive agency contract, the principal is allowing a specific agent to act on their behalf in the sale of a property, but with some critical limitations. One of those limitations is that the principal cannot compete with the agent in selling the property. If the principal were to sell the property themselves while an exclusive agency agreement is in place, they could do so without incurring any commission liability to the agent.

Thus, this arrangement gives the agent a certain exclusivity in representing the principal, fostering a more dedicated sales effort while still allowing the principal the right to sell independently if they choose to, but not in a manner that would undermine the agent’s efforts. This structure ensures that both parties have clear expectations and outlines the principal's commitment to the agent, while still leaving room for the principal to explore direct sales if they wish.

The other options do not accurately represent the nature of exclusive agency contracts as they either impose unnecessary restrictions or misinterpret the rights of the principal in this arrangement.