Agent Paul lists a home for seller Donna in Rehoboth Beach, Delaware. Before Paul finds a buyer, Donna tells Paul in confidence that she is going through a divorce and must sell quickly — she would accept $20,000 below the asking price to close within 30 days. A few weeks later, buyer Greg contacts Paul directly and asks Paul to help him write an offer on Donna's property. Paul agrees to represent Greg as well. Which of the following statements correctly describes Paul's obligations under Delaware law?
Correct Answer
A) Paul must obtain informed written consent from both Donna and Greg before proceeding as a disclosed dual agent
Under 24 Del. C. § 2973, before Paul can represent both Donna and Greg in the same transaction as a disclosed dual agent, he must obtain informed written consent from ALL parties — both Donna and Greg. Critically, as a dual agent, Paul would also be prohibited from disclosing Donna's confidential information (her willingness to accept a lower price and her divorce situation) to Greg. The listing agreement alone does not authorize dual agency.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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.
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