RES exam question on Ethics & Professional Conduct: A salesperson acting for the seller learns the seller is desperate to sell quickly
Case study — A salesperson acting for the seller learns the seller is desperate to sell quickly. This information is confidential to the seller. The buyer would benefit from knowing it. Evaluate the statements: (i) The agent must act in the seller's best interest (ii) The agent must keep the client's information confidential (iii) Disclosing the seller's urgency to the buyer would breach the duty to the seller (iv) The agent may freely reveal the seller's weak position to close a quick deal Which statements are CORRECT?
- A(i), (ii) and (iii) only
- B(i), (ii) and (iv) only
- C(ii), (iii) and (iv) only
- D(i), (ii), (iii) and (iv)
Show answer & explanation
Answer
A. (i), (ii) and (iii) only
Explanation
(i) is correct: as the seller's agent, he owes a duty to act in the seller's best interest. (ii) is correct: he must keep the client's confidential information private. (iii) is correct: telling the buyer the seller is desperate would weaken the seller's position and breach both loyalty and confidentiality. The answer is (i), (ii) and (iii) only.
Why the other options are wrong
- (iv) is wrong: he may not freely reveal the seller's weak bargaining position, even to close quickly.
Study the concept behind this question: Dual Representation & Conflict of Interest (RES)
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