Agent Derek is a licensed Arkansas real estate agent who has been working with buyer Michelle for two months. During a showing, Michelle confides to Derek that she is going through a divorce and must purchase a home within 30 days or lose a favorable financing arrangement. The seller's agent later asks Derek if Michelle has any time pressures. How should Derek respond under Arkansas agency law?
Correct Answer
C) Derek must keep Michelle's personal circumstances confidential and decline to share this information
As Michelle's buyer's agent, Derek owes her the fiduciary duty of confidentiality. Information about Michelle's personal circumstances, financial urgency, and timeline is confidential client information that Derek must protect. Disclosing it to the seller's agent would give the seller a significant negotiating advantage and would constitute a breach of Derek's duty of confidentiality to his client. Under Arkansas agency law, this duty survives the transaction and cannot be waived by a promise from the opposing agent.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
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