Which term describes the relationship in which the seller or buyer places trust and confidence in the broker as their agent?

• A. Fiduciary relationship
• B. Principal
• C. Fiduciary
• D. Common Law

Answer: (A)

Trust and confidence in a broker as the one who represents them defines a fiduciary relationship. In this setup, the broker owes the client duties of loyalty, care, confidentiality, full disclosure of material facts, obedience to lawful instructions, and accounting for funds. The client (seller or buyer) relies on the broker to act in their best interests, even if that requires putting the client’s interests ahead of the broker’s own. That combination of trust and elevated duties is what makes the relationship fiduciary. The term principal refers to the client, not the type of relationship; fiduciary describes the duties within the relationship but isn’t the relationship name itself; and common law is the broader legal framework, not the specific relationship.