Connecticut salesperson Fiona represents seller client Gary in the sale of his New Haven home. During negotiations, buyer's agent Peter tells Fiona that his client, buyer Sandra, has a hard deadline to close before the end of the month due to a lease expiration and is willing to pay above asking price if necessary. Peter shares this information casually, assuming Fiona already knows. Fiona then uses this information to advise Gary to hold firm on price. Which of the following best describes the agency disclosure and fiduciary issues in this scenario?
Correct Answer
B) Fiona violated her duty to Sandra because she used confidential buyer information, and Peter violated his fiduciary duty to Sandra by disclosing her negotiating position
This scenario involves two agency breaches. Peter violated his fiduciary duty to his client Sandra by disclosing her confidential negotiating position (the lease deadline and willingness to pay above asking) to the opposing agent. A buyer's agent owes confidentiality to the buyer client, and disclosing information that weakens the buyer's negotiating position is a serious breach. Fiona, as Gary's agent, acted within her own fiduciary duty by using the information to benefit Gary; however, the root violation lies with Peter's unauthorized disclosure of Sandra's confidential information.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.
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