Agent Olsen represents a seller in Nome. A buyer working without representation approaches Agent Olsen and signs an agreement confirming he is a customer, not a client. During negotiations, the buyer asks Agent Olsen: "Is the seller willing to come down on price?" Agent Olsen knows the seller has said privately she will accept $20,000 less than the listing price. Under Alaska agency law, what is Agent Olsen's correct course of action?
Correct Answer
D) Decline to reveal the seller's bottom line, because the duty of confidentiality to the seller as a client prevents disclosing the seller's negotiating position
Under Alaska agency law (12 AAC 64.010), a seller's agent owes the seller the fiduciary duty of confidentiality, which includes protecting the seller's negotiating position and bottom-line price. The seller's private statement that she will accept $20,000 less is confidential information that Agent Olsen cannot disclose to the buyer — even though the buyer is a customer and Agent Olsen must be honest with the buyer. Honesty to a customer means not making false statements; it does not require revealing the client's confidential information. Agent Olsen should respond that she cannot share the seller's confidential negotiating information.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
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