Agency, Fiduciary Duties, and Representation
Who represents whom
Agency is a consensual relationship in which a licensee acts for another, with that person's consent and subject to that person's control. It is created expressly (usually in writing), implied by conduct, or by ratification when a principal accepts the benefits of unauthorized acts.
Fiduciary duties are memorized as OLD CAR: Obedience (to lawful instructions only), Loyalty, Disclosure of material facts, Confidentiality, Accounting for money and documents, and reasonable Care and skill. These duties run to the client. To a customer, a licensee owes honesty, fairness, and disclosure of material facts - but not loyalty or confidentiality.
Alaska points
Alaska licensees must disclose the agency relationship in writing, and acting for both sides (dual agency) requires the informed written consent of all parties. Confidential information gained in the relationship generally survives termination. Who pays the commission does not create the agency: the seller usually compensates the buyer's broker, yet that broker represents the buyer.
Traps
- Assuming a buyer's agent represents the seller because the seller pays.
- Believing confidentiality ends at closing.
- Treating obedience as a duty to follow an unlawful instruction.
- Forgetting that ministerial acts (opening a door, delivering documents) do not create agency.
Worked example
A buyer tells her agent, 'I would pay $40,000 over list.' If that agent represents the buyer, the ceiling stays confidential; passing it to the seller's side is a breach of loyalty and confidentiality. Rule of thumb: before answering any question, ask 'Whose client am I?'