Duties the Agent Owes to Principal

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 (not to break the law, etc.)
3. Duty of loyalty: The agent may never do any of the following:
   i. Self-dealing: Agent cannot receive a benefit to the detriment of the principal.
   ii. Usurping the principal’s opportunity, or
   iii. Secret profits: making a profit at the principal’s expense without disclosure.

Question 2

Hypo: Priscilla authorizes Agnes to buy diamonds. Agnes spots choice diamonds and secretly buys them for herself for $1 million. Agnes then resells the diamonds for $2 million. What duties has Agnes breached? (Always diamonds on the bar)

Answer 2

The agent has breached the duty of loyalty by 1. Self dealing in that she did benefit herself to the Principal’s detriment, and 2. By usurping the Principal’s diamonds, and 3. By making a secret undisclosed profit on the resale of those diamonds as well
-What remedies does Priscilla have against Agnes?
This is a so what question; The principal may recover losses that are caused by the breach, and also the principal may disgorge profits (use this phrase) made by the breaching agent as well