1. (a) That's right. The agency relationship is based on trust (a 'fiduciary relationship'). It follows from this that an agent must act in accordance with the requirements of good faith. The concept of good faith gives rise to a number of specific rules. One is that an agent must deal honestly and openly with their principal. In particular, an agent must inform the principal of all known facts of which he becomes aware that may affect his principal's position. B has not done this.