Chapter 6 of 1413% of exam
General Principles of Agency
Agency defines the relationship and duties between licensees and the people they serve. Fiduciary duties are central to ethical practice.
Clients and Customers
A client (principal) is owed full fiduciary duties, while a customer is owed honesty, fairness, and disclosure of material facts but not representation. Fiduciary duties are commonly summarized as care, obedience, loyalty, disclosure, confidentiality, and accounting. Knowing whom you represent is essential.
Honesty vs. Puffing
Agents may offer opinions or sales talk (puffing) that a reasonable person would not treat as fact. However, misrepresenting or concealing material facts is fraud or misrepresentation and is prohibited. The line between opinion and fact protects consumers.