Agency
What is 'constructive fraud' in a Nevada real estate agency context?
AFraud involving new construction properties
BA breach of fiduciary duty that results in harm to the principal, even without actual fraudulent intent — such as an agent failing to disclose a material fact that damages the client's interests✓ Correct
CFraud committed by building contractors hired through a real estate agent
DA Nevada legal term for unintentional misrepresentations only
Explanation
Constructive fraud in Nevada agency law occurs when an agent breaches their fiduciary duty in a way that causes damage, regardless of whether actual fraud was intended. For example, a listing agent who fails to disclose a known defect (through negligence, not malice) may be liable for constructive fraud if the buyer suffers harm.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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