Duties Flashcards
Agent’s Duties to the Principal
An agent (even an unpaid one) is a fiduciary of their principal. So, in addition to any express contractual duties that the agent owes the principal, fiduciary duties of loyalty, obedience to lawful instructions,
and reasonable care under the circumstances (including duty to disclose all relevant information) are owed.
Duty of Care
An agent owes a duty to their principal to carry out their agency with reasonable care.
Duty of Loyalty
The agent owes a duty of undivided loyalty to the principal. This includes the following obligations:
* An agent may not use their position as agent to profit for themselves. If they do, they must account to the principal for any profits made while carrying out the principal’s instructions.
* An agent must act solely for the benefit of the principal and not to benefit themselves or a third party.
* An agent must refrain from dealing with their principal as an adverse party or from acting on behalf of an adverse party.
* An agent may not compete with their principal concerning the subject matter of the agency.
* An agent may not use the principal’s property (including confidential information) for the agent’s own purposes or a third party’s purposes
Duty of Obedience
An agent must obey all reasonable directions of their principal. If the agent disobeys a reasonable direction, the agent will be liable to the principal for any loss that the principal suffers.
Subagents
A subagent is a person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent’s principal.
Principal’s Duties to the Agent
A principal’s duties to an agent are not fiduciary in nature, as fiduciary responsibilities run only from the agent to the principal. Nevertheless, a principal has several obligations to an agent. The principal owes the
agent all of the duties imposed by their contract, reasonable compensation, and reimbursement for expenses
