Agent Derek represents buyer Tanya in Idaho. While negotiating on Tanya's behalf, Derek learns from the listing agent that the seller is facing foreclosure and must close within 30 days. Tanya has not asked Derek about the seller's situation. What is Derek's obligation regarding this information under Idaho agency law?
Correct Answer
B) Derek must disclose the information to Tanya because it is material information that could affect her negotiating position
As Tanya's buyer's agent, Derek owes her a fiduciary duty of full disclosure of all material information. The seller's urgent need to close within 30 days due to foreclosure is clearly material — it significantly affects Tanya's negotiating position and could allow her to negotiate more favorable terms. Derek must proactively disclose this information to Tanya without waiting to be asked.
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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.
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