Jennifer is a Tennessee affiliate broker representing the Petersons as their seller's agent. The Petersons ask Jennifer to tell prospective buyers that a major road expansion project near their property has been cancelled, even though Jennifer knows the project is still actively planned by the city. What should Jennifer do to fulfill her fiduciary duties under Tennessee law?
Correct Answer
B) Refuse to make the false statement and advise the Petersons of her obligation to disclose material facts truthfully
Under Tenn. Code Ann. § 62-13-401 et seq., the fiduciary duty of obedience requires a licensee to follow lawful client instructions — but it explicitly does not extend to illegal or unethical instructions. Making a false statement about a known planned road expansion is both a violation of the duty of disclosure (to buyers) and an act of misrepresentation that could constitute fraud. Jennifer must refuse and counsel the Petersons accordingly.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
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