Broker Evan works for Summit Realty in Evansville, Indiana. He has a signed listing agreement with seller Helen for her home. Buyer Warren contacts Evan directly, without any prior broker contact, and asks Evan to help him purchase Helen's property. Evan wants to represent both parties. Helen and Warren both sign written consent forms agreeing to dual agency. During negotiations, Warren confides to Evan that he would be willing to pay $15,000 more than his initial offer if Helen counters. Under Indiana law, what must Evan do with this information?
Correct Answer
D) Keep Warren's information confidential and not disclose it to Helen, even though Evan is also Helen's agent
Under IC 25-34.1-10, even in a properly consented dual agency relationship, a dual agent cannot disclose one party's confidential negotiating information to the other party. Warren's willingness to pay more than his initial offer is confidential information that could harm his negotiating position. Evan must keep this information confidential from Helen. The duty of confidentiality regarding negotiating strategy survives dual agency and is one of the core limitations on what a dual agent can do.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
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