Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

A real estate agent, by virtue of his fiduciary duty to his principal, is not allowed to buy the property being sold by his principal

A real estate agent, by virtue of his fiduciary duty to his principal, is not allowed to buy the property being sold by his principal without full disclosure to and consent from his principal. The real estate agent does not want to disclose that he is the buyer of the property, so he forms a corporation and takes an offer to his principal from the corporation. Based on these facts, which of the following is true if the principal finds out the corporation/buyer is owned by the real estate agent and objects to the contract?

a.

The court would not enforce the contract and would "lift the corporate veil."

b.

The court would enforce the contract because this is not a direct breach of the agent's fiduciary duty.

c.

The court would dissolve the corporation.

d.

The court would enforce the contract because the corporation is a separate legal entity in the eyes of the law.

e.

The court would enforce the contract, but the principal would be able to claim any profits from the agent when he took them out of the corporation.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting IFRS

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

3rd edition

978-1119372936

Students also viewed these Finance questions