The law of agency and fiduciary duties

Agency begins with authority and trust

In general agency law, a principal authorizes an agent to act on the principal's behalf and subject to the principal's control. Express authority is stated; implied authority covers acts reasonably necessary to carry out the authorized task. Apparent authority depends on the principal's manifestations to a third party, not merely the agent's claim. A special agent handles a particular transaction or limited task; a general agent handles a continuing range of business activities. Authority to market property does not itself authorize signing a sale contract for the owner.

A fiduciary relationship carries trust and confidence. Loyalty puts the principal's interests ahead of the agent's competing interests. Confidentiality protects entrusted information. Obedience means following lawful instructions. Full disclosure gives the principal material information needed for informed decisions. Accounting protects and tracks entrusted funds, while skill, care, and diligence require competent performance. An agent must not follow instructions to conceal legally required disclosures.

Florida's framework

Florida permits a licensee to act as a single agent or transaction broker, or to work with no brokerage relationship. A single agent represents either buyer or seller as a fiduciary, not both. Florida prohibits disclosed and nondisclosed dual agency. Transaction brokerage is presumed unless single agency or no brokerage relationship is established in writing.

A Florida transaction broker provides limited representation to one or both parties without fiduciary representation. Duties include honesty and fairness, accounting, skill and care, timely offer presentation unless directed otherwise in writing, required residential material-fact disclosure, and limited confidentiality. Protected information includes negotiating limits and motivations unless the party waives confidentiality in writing. Assisting both parties in this role is not dual agency.

A Florida single agent also owes loyalty, confidentiality, obedience, and full disclosure. For example, a seller's single agent should disclose a personal interest in buying the listing and must not suppress a competing offer to obtain a bargain. With no brokerage relationship, the licensee still owes honesty and fairness, disclosure of known material residential facts not readily observable to the buyer, and accounting for entrusted funds.

Identify the relationship before the duty

Under Florida law, payment alone does not establish representation. A person paying a commission is not necessarily the principal. A principal is the party in a single agent relationship; a customer may be represented or unrepresented. A single agent must obtain the principal's prior written consent before transitioning to transaction brokerage. For an exam scenario, identify the role, identify whose interests are involved, and then select the duty that governs.