After a seller accepts an offer, the seller's agent receives a second written offer at a higher price before the sale closes. California licensing rules require the agent to present that offer to the seller. Which fiduciary duty does this requirement carry out?
Correct Answer
B) The duty of disclosure, because the seller must learn facts that affect the decision
Presenting offers is an application of the agent's duty to keep the principal informed. Acceptance of one offer does not end that duty, and the Commissioner's rules on unlawful conduct treat failure to present a written offer received before the close of a sale as a violation unless the owner has directed otherwise or the offer is patently frivolous. A seller cannot consider a backup offer, or decide whether to seek a release from the first contract, if the offer never reaches them. Obedience concerns carrying out instructions and loyalty concerns putting the client ahead of the agent; neither is what makes the information itself have to travel.
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Related Topics & Key Terms
Key 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 legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
More Laws Of Agency Fiduciary Duties Questions
Under California law, the agency disclosure requirements apply to which types of property?
Under California law, when must a buyer's agent give the agency disclosure form to the buyer?
A broker who fails to promptly disclose their dual agency status is subject to:
A broker’s fiduciary obligation to protect a seller’s confidential information continues:
A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to:
- → Under California Business and Professions Code §10140.6, what must a licensee disclose on solicitation materials intended to be the first point of contact with consumers, such as a business card or an open house sign?
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