Oregon 30-Hour Real Estate Law Practice Test

What is considered one of the most fundamental fiduciary duties?

1. Obedience

2. Truthfulness

3. Loyalty

4. Competence

The correct answer is: Loyalty

The most fundamental fiduciary duty is loyalty. This duty requires that an agent act in the best interests of their client, placing the client's interests above their own or those of others. Loyalty ensures that the agent remains faithful to the client, avoiding conflicts of interest and not using the client’s information or resources for personal gain. In the context of real estate, loyalty means that the agent must advocate for the client's needs and objectives throughout the transaction, ensuring that all actions taken are in the client’s best interest. This loyalty is essential to building trust in the agent-client relationship. While obedience, truthfulness, and competence are also vital fiduciary duties, they come secondary to loyalty. Obedience involves following lawful instructions from the client, truthfulness refers to being honest in disclosures and dealings, and competence pertains to having the necessary skills and knowledge to represent the client effectively. However, these duties do not hold the same foundational significance as loyalty, which is the cornerstone of the fiduciary relationship.