Arkansas agent Fiona represents buyer Leon through a signed buyer representation agreement. During negotiations, Fiona discovers that the seller is under severe financial distress and must sell within 30 days or face foreclosure — information the seller's agent inadvertently revealed. Leon asks Fiona whether she must share this information with the seller's agent. Under Arkansas agency law, which of the following best describes Fiona's obligation?
Correct Answer
B) Fiona must disclose the seller's financial distress to Leon and may use it in negotiations on his behalf, with no duty to share it with the seller's agent
Under Arkansas agency law, Fiona's fiduciary duties run exclusively to her client, Leon. The seller's financial distress is material information that Fiona has a duty to disclose to Leon and use in his best interest during negotiations. There is no obligation for Fiona to share this information with the seller's agent — doing so would actually breach her duty of loyalty to Leon. The fact that the information was obtained inadvertently does not diminish Fiona's duty to use it on Leon's behalf.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
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.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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