Duties

Question 2

Duties Agent owes to Principal

Answer 2

1. Duty of Care
2. Duty of Loyalty
3. Duty of Candor
4. Duty to account and keep Principal’s assets separate from Agent’s assets.

Question 3

What does the duty of care consist of?

Answer 3

Agent must:
(1) follow Principal’s reasonable instructions,
(2) perform duties with reasonable care, and
(3) indemnify Principal for loss caused by Agent’s wrongful behavior or failure to act with reasonable care

Question 4

What does the duty of Loyalty consist of?

Answer 4

Agent must:
(1) prefer Principal’s interests over Agent’s interest or the interests of others,
(2) avoid self-dealing, and
(3) neither compete with Principal nor usurp business opportunities belonging to Principal

Question 5

What does the duty of candor consist of?

Answer 5

Fully disclose all relevant facts of which Principal would reasonably want to know

Question 6

Principal’s duties to Agent

Answer 6

1. Duty of Compensation- reasonable value for services rendered (unless agreed otherwise)
2. Duty of Reimbursement- for all reasonable expenses incurred in the scope of agency