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To the other party he owes a duty of care only

A worked RES examination question on negligence duty of care, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 1Lesson 8Negligence duty of careFree — no sign-up

The question

A team leader is describing to a new salesperson the difference between what an agent owes his own client and what he owes the party on the other side of the same transaction. She has assumed that because an agent must be honest with everybody he deals with, the obligations must run equally in both directions, and had said as much to a buyer earlier that week when the buyer asked whether she was "on his side too". The team leader explains that honesty is indeed common to both, but that one of the two relationships carries a further and considerably heavier set of obligations which the other does not, and that the distinction matters most precisely when the two parties' interests diverge.

Which statement is correct?

  1. A. He owes a fiduciary duty to both, and a duty of care to neither.
  2. B. He owes a fiduciary duty to the other side only.
  3. C. Both a fiduciary duty and a duty of care to the client; care to the other side.
  4. D. He owes his client a duty of care only, fiduciary duties arising solely by express agreement.

The answer, and why

Answer: C

The rule. To his client an agent owes both fiduciary duties and a duty of care. To the other party he owes a duty of care only.

Why C is correct. Two duties to the client, one to the other side.

The other options.

  • A owes fiduciary duties to both.
  • B inverts the relationship entirely.
  • D denies that fiduciary duties arise without express agreement.

Exam note. Loyalty is owed to one side. Care is owed to both.

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