Agent Derek in Arkansas is representing seller Linda in the sale of her Fayetteville property. During an open house, buyer Greg expresses strong interest and asks Derek to help him write an offer. Derek has no existing buyer representation agreement with Greg. If Derek proceeds to represent both Linda and Greg in the same transaction without obtaining proper informed written consent from both parties, Derek would be in violation of which agency principle under Arkansas law?
Correct Answer
C) The duty to avoid undisclosed dual agency
Under Arkansas agency law, dual agency — representing both buyer and seller in the same transaction — is permissible only with the informed written consent of both parties. If Derek represents both Linda and Greg without obtaining proper written consent from each, he is engaged in undisclosed dual agency, which violates Arkansas real estate law and AREC regulations and constitutes grounds for disciplinary action.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
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.
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