Agency Relationships and Disclosures Practice Question
Question
A license applicant is studying a California practice scenario involving fiduciary duty of loyalty. Which statement best describes fiduciary duty of loyalty? (Item 101)
Answer choices
- A. Put the client’s interests ahead of the licensee’s personal interest.
- B. It can be ignored if the transaction is expected to close quickly.
- C. It requires the licensee to favor the other party over the licensee’s own client.
- D. It is primarily a tax rule with no effect on brokerage practice.
Correct Answer
A. Put the client’s interests ahead of the licensee’s personal interest.
Explanation
The correct answer is A because fiduciary duty of loyalty requires candidates to put the client’s interests ahead of the licensee’s personal interest. 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 loyalty