Also known as: dual agency rules · dual-agency rule · dual agency · dual representation
Written by attorneys · grounded in primary & secondary sources — see below
A doctrine in agency law that governs an agent simultaneously representing two principals in a transaction between them. The agent must deal fairly with each principal and must disclose to each all facts the agent knows or should know would reasonably affect that principal's judgment in consenting to the dual representation, unless a principal has manifested knowledge of the facts or indifference to them.
Danielle Dixon hired Kiara to manage her downtown office building and lease vacant space. Kiara also represented Delta Housing, a competing building in which she held an ownership interest, and steered high-quality prospects to Delta without telling Danielle. Danielle later discovered the dual representation and sued to rescind the affected leases.
David Dawson retained H & R Block to prepare his tax return and obtain a rapid refund loan. H & R Block prepared the return as David's agent but then arranged the loan as the bank's agent without disclosing the switch or the terms that affected David's judgment. David later challenged the loan arrangement as tainted by undisclosed dual agency.
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The transaction between the two principals is voidable at the election of either principal. The agent breaches the duty of loyalty by failing to obtain consent through disclosure.
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No. Liability arises from the agent's failure to disclose material facts and to act fairly, regardless of whether the principal ultimately suffers quantifiable loss. The rule protects the principal's right to informed consent.
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Yes. A principal who manifests knowledge of the relevant facts or indifference to them is not owed further disclosure. The waiver must be knowing and voluntary.
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