"Ann Agent was hired by Buyer to locate a piece of property suitable for building an office complex. Ann and her cousin jointly owned a piece of property that suited Buyer's needs. Without telling Buyer of her ownership interest, Ann negotiated the purchase on Buyer's behalf. The price for the property was its fair market value. What options are available to Buyer when he learns that Ann was the seller

The correct answer is He may rescind the contract because Ann violated her duty of loyalty.

Explanation:

The duty of loyalty, as the obligation of any agent to put the interests of their principal before their own, constitutes one of the most fundamental rules (rectius, standard or general clause) of Private Law. Its realization is also one of the most difficult tasks assigned to scholars, not only to jurists but also to moral philosophers, economists, psychologists and biologists. Cooperation between human beings requires “being able to trust” that those whom we use to extract the advantages of specialization behave loyally when the conditions in which the hiring is carried out are not ideal. Under ideal conditions, the possibility that a contracting party may prevail over its interests over those of the counterparty is ideal to produce damages to the counterparty. The counterparty simply will not enter into the contract if the price does not cover the risks associated with the conflict. But we do not use the expression "conflict of interest" to mean that, in bilateral contracts, the parties normally have opposite interests. There has to be a typical situation in which the other party cannot protect itself by denying consent to the conflicting claim of the other. Typically, when the object of the contract includes the provision of information or advice or the performance of an order on behalf of another. Not in all these cases a duty of loyalty is imposed on the person who informs, advises or carries out the order. If the person who receives the information, the advice or the person in charge of the management can protect himself against the possibility that the person who reports, advises or executes the order prevails his own interest over that of the principal, there is no need to impose a duty of loyalty.