3. Duties Which Agents Owe to Principals.

Question 1

In return for reasonable compensation and reimbursement of expenses, agents owe principals:

Answer 1

1. Duty of care
2. Duty to obey instructions that are reasonable
3. Duty of Loyalty

Question 2

Under the duty of loyalty, the agent may never do any of the following:

Answer 2

1. Self-dealing: Agent cannot receive a benefit to the detriment of the principal.
2. Usurping the principal’s opportunity, or
3. Secret profits: making a profit at the principal’s expense without disclosure.

Question 3

Remedies for a breach of loyalty

Answer 3

The principal may recover losses that are caused by the breach, and may disgorge profits made by the breaching agent as well.