Agency Relationships and Disclosures Practice Question

Question

A first-time buyer asks for exam-focused clarification involving fiduciary duty of confidentiality. Which statement best describes fiduciary duty of confidentiality? (Item 143)

Answer choices

1. A. It is valid only when the buyer pays cash and no lender is involved.
2. B. It prevents any later disclosure, even when new facts become known.
3. C. Protect confidential client information unless disclosure is authorized or legally required.
4. D. It applies only to commercial property and never to residential transactions.

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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