Oregon 30-Hour Real Estate Law Practice Test

Which duty is violated if an agent does not inform their client of a conflict of interest?

1. The duty of loyalty

2. The duty of accounting

3. The duty of disclosure

4. The duty of obedience

The correct answer is: The duty of disclosure

The duty of disclosure is fundamentally about an agent's obligation to inform their clients of any material information that could impact their decisions regarding a real estate transaction. This includes notifying clients of conflicts of interest that may arise during the agency relationship. When an agent fails to disclose a conflict of interest, they are not meeting their responsibility to provide all relevant facts that may affect the client's interests or choices. By not informing the client, the agent undermines the trust that is essential to the agent-client relationship and potentially puts the client at a disadvantage. This breach can lead to significant consequences, not only for the agent in terms of legal ramifications but also for the client, who may make uninformed decisions based on incomplete information. Therefore, fulfilling the duty of disclosure is crucial in upholding the integrity of the agent's role.