What duty has Newt allegedly breached regarding the earnest money?

The correct answer regarding the duty Newt has allegedly breached concerning the earnest money is related to accounting. In real estate transactions, agents have a fiduciary duty to account for all funds received in the course of their duties. This includes earnest money, which is typically a deposit made to demonstrate a buyer's serious intent to purchase a property.

When an agent fails to ensure that the earnest money is handled correctly—such as not depositing it into the proper trust account, misplacing it, or using it for unauthorized purposes—they are breaching their duty of accounting. This duty requires them to keep a precise record of all financial transactions and ensure that money held on behalf of clients is safeguarded and properly managed.

The breach of accounting is significant because it can lead to financial loss for clients and may jeopardize the transaction itself. This obligation is critical in maintaining trust between the agent and their clients, and failure to uphold it can have serious ramifications for both the agent's career and the interests of the parties involved in the real estate transaction.