The distinction between customer and client is fundamental to understanding agency. The agent's primary obligation is to the client (principal). The customer (third party) receives fair treatment and honest information but not advocacy or loyalty.
In a seller agency relationship, the seller is the client (receiving full fiduciary duties) and the buyer is the customer (receiving honest treatment). The agent must disclose material defects to the buyer but advocates for the seller's best interests.
This distinction appears frequently on exams. CLIENT = full fiduciary duties (OLD CAR). CUSTOMER = limited duties (honesty, fairness, disclosure of material facts). An agent can be held liable for lying to a customer but is not required to advocate for them.
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Frequently Asked Questions
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