Salesperson Greg is a designated buyer's agent for purchaser Wendy in a transaction handled within his brokerage, where salesperson Tara is the designated seller's agent for seller Mr. Okonkwo. The supervising broker, Broker Davis, later learns that Greg disclosed Wendy's maximum purchase price to Tara during a casual office conversation. Under Missouri law, who bears legal responsibility for this breach, and why?
Correct Answer
D) Both Greg and Broker Davis may bear responsibility — Greg for the direct breach of fiduciary duty, and Broker Davis for failure to adequately supervise.
Under Missouri law (RSMo § 339.730 and MREC rules), designated agents retain individual fiduciary duties to their respective clients, meaning Greg directly breached his duty of confidentiality to Wendy by disclosing her price ceiling. Additionally, Missouri law imposes non-delegable supervisory duties on the sponsoring broker — Broker Davis is responsible for ensuring that affiliated licensees comply with agency obligations, including maintaining confidentiality walls in designated agency arrangements. Both Greg and Broker Davis can face MREC disciplinary action: Greg for the direct breach, and Davis for inadequate supervision.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
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