Which statement best describes the agent's duty to disclose information to the principal?

• A. Disclosing only non-material information fulfills the duty.
• B. The agent must disclose information material to the principal's decisions and actions.
• C. Disclosures are optional.
• D. Disclosure is required only when requested by the principal.

Answer: (B)

An agent’s duty to the principal includes a duty of disclosure for information that is material to the principal’s decisions and actions. This means the agent must proactively reveal facts that a reasonable principal would consider important when deciding how to proceed, such as risks, conflicts of interest, or anything that could affect value or outcomes. Non-material information, or information not known to be relevant, need not be disclosed, and the duty isn’t satisfied only when the principal requests information. The agent should disclose material facts without being prompted to help the principal make informed choices. For example, if the agent knows of a defect or a competing offer, that information should be disclosed because it could influence the principal’s decision.