Oregon 30-Hour Real Estate Law Practice Test

Which fiduciary duty may conflict with the agent's personal interests?

1. The duty of accounting

2. The duty of obedience

3. The duty of loyalty

4. The duty of disclosure

The correct answer is: The duty of loyalty

The duty of loyalty is fundamental to the fiduciary relationship between an agent and their client. This duty requires the agent to act in the best interests of the client, placing the client's needs and interests above their own. When these interests diverge, such as when an agent has a personal financial interest in a deal or is motivated by self-benefit, a conflict arises. For example, if an agent stands to gain a significant commission from steering a client towards a certain property that may not necessarily be the best choice for the client, the agent's personal motivations potentially compromise their obligation under the duty of loyalty. This duty ensures that the agent avoids any actions that could lead to a conflict of interest, thereby maintaining trust and integrity in the relationship. Understanding the duty of loyalty is crucial for agents, as it not only protects clients but also upholds the agent's professional reputation and compliance with real estate regulations. By keeping the client's best interests at heart, agents can effectively fulfill their responsibilities and establish strong, trusting client relationships in their practice.