Duties of A & P

Question 1

Agency

Answer 1

An agency relationship arises when one party (the principal) manifests consent to have another party (the agent) act on the principal’s behalf and subject to the principal’s control, and the agent so consents.

Question 2

A’s Duties to P

Answer 2

A has a fiduciary relationship to P and owes P: a duty of care and a duty of loyalty.

Question 3

Duty of Care (Agency)

Answer 3

Reasonable care.

Question 4

Duty of Loyalty (Agency)

Answer 4

Fairness.

A cannot use his position to profit (or must account for those profits), must act solely for P’s benefit, cannot deal with P as an adverse party, cannot compete with P, cannot use P’s property for his own purposes, must obey all reasonable directions.

Question 5

P’s Remedies for Breach

Answer 5

If A breaches his fiduciary duties to P, a court can impose a wide range of remedies to do justice in the situation.

Question 6

P’s Duties to A

Answer 6

P owes A reasonable compensation and reimbursement, cooperation, and any duties imposed by the contract.