Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is one key characteristic of fiduciary relationships in agency?

1. Limited authority

2. Trust and confidence

3. Consensual action

4. Written contracts

The correct answer is: Trust and confidence

A key characteristic of fiduciary relationships in agency is the presence of trust and confidence. In these relationships, one party (the agent) acts on behalf of another party (the principal) with a significant level of trust placed in the agent to act in the best interests of the principal. This dynamic is fundamental to the concept of agency because it underscores the obligation of the agent to prioritize the interests of the principal above their own and to perform their duties with loyalty, care, and integrity. While limited authority, consensual action, and written contracts may play roles in various agency agreements, they do not encapsulate the essence of the fiduciary relationship as effectively as trust and confidence does. Trust and confidence directly relate to the expectations and responsibilities that arise within a fiduciary relationship, making it the most defining attribute of such relationships in the context of agency.