Broker Paul listed a home in Covington and later learned that the seller is going through a divorce and is under significant financial pressure to sell quickly at any price. A buyer represented by another agent submits a below-market offer. The buyer's agent asks Paul if the seller is motivated. What is Paul's correct course of action under Louisiana agency law?
Correct Answer
B) Decline to reveal the seller's personal financial situation because it is confidential information protected by his fiduciary duty to the seller
As the seller's agent, Paul owes fiduciary duties to the seller, including the duty of confidentiality. The seller's divorce and financial distress are personal circumstances — not physical defects or material facts about the property itself — and are protected confidential information. Disclosing them would harm the seller's negotiating position and constitute a breach of Paul's fiduciary duty under Louisiana agency law (La. R.S. 37:1467).
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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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