Agency Relationships and Disclosures Practice Question

Question

A license applicant is studying a California practice scenario involving fiduciary duty of confidentiality. Which statement best describes fiduciary duty of confidentiality? (Item 63)

Answer choices

1. A. It is primarily a tax rule with no effect on brokerage practice.
2. B. It removes the need for written disclosure if the licensee believes the client already knows.
3. C. Protect confidential client information unless disclosure is authorized or legally required.
4. D. It can be ignored if the transaction is expected to close quickly.

Correct Answer

C. Protect confidential client information unless disclosure is authorized or legally required.

Explanation

The correct answer is C because fiduciary duty of confidentiality requires candidates to protect confidential client information unless disclosure is authorized or legally required. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.

Question details

• Difficulty: easy
• Domain: Agency Relationships and Disclosures
• Objective: fiduciary duty of confidentiality

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