TRESA 2002 · Law of Agency

Duties to Clients

Fiduciary Obligations & Professional Responsibilities

The agent is considered in law to represent the principal and to bring the principal into legal relationships with other parties. Fiduciary duties are explained through six core categories — each binding the agent to the highest standard of care.

I

Six Fiduciary Duties to Clients

Owed to the Principal (Client)

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Disclosure

The agent must disclose to the principal any information relevant to the transaction, including all facts affecting the value or desirability of the property and all known relevant and material information.

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Competence

The agent must exercise a degree of competence expected from an average person in that profession. As an extension of the principal, the agent must use superior skill and knowledge. A specialist must exercise competence in that specialty.

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Obedience

An agent is obligated to obey the principal's lawful and reasonable instructions, even if the agent personally disagrees with them.

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Accounting

An agent is obligated to account for all monies or property entrusted to their care that belongs to the principal — safeguarding any money or documents relative to the principal's transactions or affairs.

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Confidentiality

An agent must not use information acquired as the principal's agent for any purpose likely to cause the principal harm or interfere with the principal's business, now or in the future. This is distinct from the duty to disclose known material facts about property to non-principals.

Most Important
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Loyalty

The most important duty an agent has toward the principal is loyalty. The agent must place the interests of the principal above all else — except the law — in carrying out functions as an agent.

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II

Duties to Third Parties

Owed to Customers & Non-Principals

Obligations Beyond the Principal Relationship

Agents owe third parties (e.g., customers) the ethical duty to be honest, the legal duty not to misrepresent, and the responsibility to exercise due care when answering inquiries. These obligations arise independently of the fiduciary relationship and reflect the professional's broader duty to treat all persons fairly and honestly.

Ethical Honesty No Misrepresentation Due Care