Question

Ann Agent was hired by Buyer to locate a piece of property suitable for building an office complex. Ann and her cousin jointly owned a piece of property that suited Buyer's needs. Without telling Buyer of her ownership interest, Ann negotiated the purchase on Buyer's behalf. The price for the property was its fair market value. What options are available to Buyer when he learns that Ann was the seller?

Answer 1

Answer: He may rescind the contract because Ann violated her duty of loyalty

Explanation: In simple words, duty of loyalty refers to the obligation that stands for the individuals in authority stating that any such person should make decisions without any undisclosed personal conflict that they may have in that decision.

In the given case, Ann did not disclose to the buyer that she has personal benefit from the property thus the buyer can cancel such a purchase.