Agency and License Law Practice Question
Question
A client asks whether a fact should be disclosed for the North Carolina Real Estate Broker Exam involving fiduciary loyalty and North Carolina Real Estate Commission. Which statement is the best answer? (Item 4)
Answer choices
- A. The issue can be ignored if the parties want to close quickly.
- B. The rule applies only to commercial transactions and never to residential transactions.
- C. Client funds may be mixed with business funds if the broker reconciles the account later.
- D. Put the client’s interests ahead of the licensee’s personal interest in a way that fits North Carolina exam practice.
Correct Answer
D. Put the client’s interests ahead of the licensee’s personal interest in a way that fits North Carolina 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 North Carolina 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