Agency Relationships and Fiduciary Duties
Creating and classifying agency
Agency in Bermuda arises by express appointment, by implication from conduct, or by ratification. The core fiduciary duties are loyalty, obedience to lawful instructions, disclosure of material information, confidentiality, accounting for money and property, and reasonable care and skill. A seller's agent owes undivided loyalty to the seller; a buyer's agent owes it to the buyer; a dual agent owes duties to both and must obtain informed written consent. Candidates must be able to distinguish a client from a customer: a customer receives honest dealing and disclosure of material facts but not advocacy or confidential advice.
Traps to watch
Examiners like the scenario where an agent learns something damaging about the seller's property and asks whether to disclose it. Material defects affecting value must be disclosed; confidential negotiating positions generally may not. Another trap is undisclosed dual agency - acting for both sides without consent is a breach even if the outcome pleased both. Watch also for secret profit, referral fees taken without disclosure, and the agent who continues to act after the relationship ends using confidential information.
Rule of thumb
If the agent's own interest, or a second client's interest, could influence advice, disclose it in writing and get consent before proceeding.
Worked example
An agent representing the seller is asked by the buyer to "just tell me what the seller will really take". The agent must decline to reveal the seller's confidential minimum and refer the buyer to their own representative.