New Hampshire licensee Diane is a seller's agent for a property in Meredith. During a showing, the buyer — who has no agent — tells Diane that he is going through a divorce and must close within 45 days or he will lose his financing. The buyer asks Diane to keep this information confidential and not share it with the seller. How should Diane respond?
Correct Answer
C) Diane must disclose the buyer's motivation and timeline to the seller because her fiduciary duty of loyalty runs to the seller, not the buyer
As the seller's agent, Diane owes fiduciary duties — including loyalty, confidentiality, and full disclosure — to the seller, not to the buyer. The buyer's motivation (divorce, 45-day deadline, financing pressure) is material information that could affect the seller's negotiating position. Diane is legally and ethically obligated to disclose this information to her client, the seller. She cannot agree to keep it confidential because doing so would breach her fiduciary duty of loyalty to the seller under NH agency law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
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