Even without payment, a gratuitous agent still owes fiduciary duties to the principal. The lack of compensation does not reduce the agent's legal obligations. However, the standard of care may be slightly lower than for a compensated agent in some jurisdictions.
A licensed agent helps a family member sell their home without charging a commission. Despite not being paid, the agent still owes full fiduciary duties including disclosure, loyalty, and reasonable care.
The key exam point: NO compensation does NOT mean NO fiduciary duty. A gratuitous agent still owes OLD CAR duties. An agent cannot claim "I wasn't being paid" as a defense for breach of duty.
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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