Nevada salesperson Victor represents seller Carol in the sale of her home. During a showing, buyer prospect Dan mentions to Victor that he recently went through a bankruptcy and is worried about qualifying for a loan. Victor does not represent Dan. Later, Carol asks Victor if he knows anything about Dan's financial situation. Under Nevada law, what must Victor do?
Correct Answer
A) Disclose Dan's bankruptcy to Carol, since Victor's primary fiduciary duty is to his client, the seller
Under NRS 645.254, Victor owes fiduciary duties to Carol as his client, including the duty to disclose all material information relevant to the transaction. A buyer's disclosed financial difficulty — including a recent bankruptcy that could affect loan qualification — is material information that Victor must share with Carol. Dan is a customer (not Victor's client), and information Dan volunteered about his financial situation is not protected by an agent-client confidentiality relationship. Victor's duty of disclosure to Carol overrides any informal expectation of privacy Dan may have had.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
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.
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