South Dakota salesperson Dana represents seller Bob under a listing agreement. During a showing, buyer Ann mentions to Dana that she is going through a divorce and must purchase a home within 30 days or lose her financing approval. Ann is not represented by any agent. Which of the following actions would be most consistent with Dana's legal obligations under South Dakota law?
Correct Answer
A) Disclose Ann's situation to Bob because Dana owes Bob full disclosure of material facts
Dana is Bob's seller's agent and owes Bob full disclosure of all material facts that could affect the transaction, including information about the buyer's motivation, urgency, and negotiating position. Ann's time pressure and personal circumstances are highly material to Bob's negotiating strategy. Because Ann is an unrepresented customer (not Dana's client), Dana does not owe Ann confidentiality. Dana's fiduciary duty runs exclusively to Bob, and disclosing Ann's situation to Bob is required to fulfill that duty.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
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