What action did Broker Smithson take that constituted a breach of the agency agreement?

Broker Smithson's action of advertising below the listing price represents a breach of the agency agreement because it contradicts the broker's fiduciary duty to act in the best interests of the client—the seller. When a broker is engaged by a seller, they have a responsibility to promote the property effectively to maximize its value. Advertising at or above the listing price aligns with this duty, as it helps attract potential buyers who may be willing to pay the full asking price or more.

By advertising the property below the listing price, the broker undermines the seller’s position and could lead to offers that do not meet the client's expectations or financial needs. This not only affects the seller's ability to sell the property for the best price but could also damage the seller's trust in the broker's ability to represent their interests adequately. In essence, the broker's duty to act loyally and to advocate for the best financial outcome for the seller is compromised when they choose to advertise at a discount to the agreed-upon listing price.