Agent Duties
Lesson:
Parties (principals) often employ others (agents) to perform work.
The agents have certain obligations to the principals:
- Duty of loyalty - the agent must work for the benefit of the principal
- Duty to obey instructions - the agent must follow reasonable instructions
- Duty of care - the agent must work diligently for the principal
- Duty to inform - the agent must promptly disclose material information
- Duty to account - the agent must keep accurate records
A client came to you, complaining about his agent.
Here are the relevant facts:
- The agent knows the company’s main supplier is about to declare bankruptcy but doesn’t warn the principal.
Which aspect of the principal-agent relationship was breached by the agent?
Answer:
- The agent failed to uphold the duty to inform.