Agent Donovan has a buyer brokerage agreement with buyer Simmons in Virginia. Simmons makes an offer on a home listed by a different brokerage. The listing agent, agent Vega, asks Donovan if Simmons would accept seller financing. Donovan knows Simmons has excellent credit and strong income, and that seller financing is not necessary, but Simmons has privately told Donovan she would consider it as a last resort. Under Virginia law, which of the following BEST describes Donovan's obligation?
Correct Answer
D) Donovan must not disclose Simmons's openness to seller financing because it is confidential information that could harm Simmons's negotiating position.
Under Va. Code § 54.1-2131, a buyer's agent owes the client the fiduciary duty of confidentiality. Simmons's private disclosure that she would consider seller financing 'as a last resort' is precisely the type of confidential negotiating information that Donovan must protect. Disclosing it to Vega would reveal Simmons's negotiating flexibility and could be used against her to extract less favorable terms. The confidentiality duty applies even when the information might seem helpful to the transaction overall.
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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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