A Michigan licensed salesperson working for Broker A receives a signed purchase offer from a buyer. The salesperson knows that the seller is going through a divorce and is under financial pressure to sell quickly. Without informing the buyer, the salesperson tells the seller directly that the buyer would accept a lower price than offered. Under the Michigan Occupational Code, which violation has most likely occurred?
Correct Answer
B) The salesperson violated the buyer's confidentiality and fiduciary duty by disclosing the buyer's negotiating position to the seller
Under the Michigan Occupational Code (MCL 339.2512) and Michigan agency law, a salesperson representing a buyer owes that buyer fiduciary duties, including the duty of confidentiality. Disclosing to the seller that the buyer would accept a lower price is a direct breach of the buyer's confidentiality and the duty of loyalty. This information constitutes the buyer's negotiating strategy, which the agent is obligated to protect. This conduct could result in disciplinary action under MCL 339.2512.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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