CFE – Law — Question 35

Which of the following is the MOST ACCURATE statement about the circumstances under which a conflict of interest claim would be actionable against an agent?

Answer options

• A. The agent must have informed the principal of their actions.
• B. The agent must have had an undisclosed interest in a matter that could influence their professional role.
• C. The agent must have received written notice that conflicts are prohibited.
• D. The agent must have breached the duty of fidelity that they owed to their principal.

Correct answer: D

Explanation

The correct answer is D because a breach of the duty of fidelity indicates that the agent has failed to act in the best interests of the principal, which is a key factor in establishing an actionable conflict of interest. Options A, B, and C do not necessarily lead to an actionable claim as they focus on disclosure and notification rather than the fundamental duty owed to the principal.