Agency and License Law Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Michigan Real Estate Salesperson Exam involving fiduciary loyalty and Michigan occupational licensing regulation. Which answer best reduces risk? (Item 112)
Answer choices
- A. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
- B. The requirement matters only when the buyer obtains institutional financing.
- C. The affiliated licensee may handle the matter independently without broker responsibility.
- D. Put the client’s interests ahead of the licensee’s personal interest in a way that fits Michigan exam practice.
Correct Answer
D. Put the client’s interests ahead of the licensee’s personal interest in a way that fits Michigan exam practice.
Explanation
The correct answer is D because fiduciary loyalty requires candidates to put the client’s interests ahead of the licensee’s personal interest. The Michigan reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: hard
- Domain: Agency and License Law
- Objective: fiduciary loyalty