AgencyIntermediateCalifornia Exam

An agent who secretly profits from a transaction without the principal's knowledge has violated the fiduciary duty of:

AObedience
BReasonable care and diligence
CLoyaltyCorrect
DFull disclosure

Why Loyalty Is Correct

Answer C: Loyalty

The duty of loyalty requires the agent to act in the principal's best interests and prohibits self-dealing or secret profits. Secretly profiting from a transaction is a serious breach of this duty.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

Key Agency Terms in This Question

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