Licensee A receives an offer below the listed price from Licensee B who works for the buyer. Licensee B tells Licensee A that the buyer loves the house and will pay full price. Has Licensee B violated the law of agency?

This choice suggests that the violation depends on whether Licensee A agrees to secrecy, which misinterprets the duty of loyalty. Licensee B's obligation to protect the buyer's interests exists regardless of any agreement with Licensee A; the breach occurs simply by disclosing confidential information.

While communication to another licensee may not directly breach confidentiality toward the principal, it still constitutes a breach of the duty of loyalty. Licensee B's obligation is to safeguard the buyer's confidential information, regardless of the recipient's status as a licensee.

This option incorrectly assumes that revealing the buyer's intentions is beneficial for the seller. In reality, such disclosure can undermine the buyer's negotiating power and does not align with the best interests of the principal, which is to secure the highest possible price.