Duties of Agent and Principal to Each Other Flashcards
1
Q
What are an Agent’s Duties to the Principal?
A
- Express Contractual Duties
- 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.
- Duty of Obedience: An agent must obey all reasonable directions of their principal.
2
Q
What are some of the main responsibilities included in the Duty of Loyalty?
A
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.
3
Q
Is an agent liable for subagents?
A
An agent has absolute liability to the principal for breaches by a subagent.
- If principal does not authorize agent to appoint subagent, the subagent does not owe duties to the principal but they owe duties to the agent
4
Q
What are the Principal’s Duties to the Agent?
A
- Compensation
- Cooperation
- Indemnity/Reimbursement
- Express Contractual Duties
5
Q
What are an Agent’s Remedies for Principal’s Breach of Duties?
A
- Contractual remedies
- Possessory Liens
6
Q
What are the Principal’s Remedies for Agent’s Breach of Duties?
A
- Contract remedies (if agent compensated)
- Tort remedies
- Constructive trust
- Action for secret profits
- Withhold compensation
- Terminate agency
