Fiduciary duties

Question 1

What duties does an agent owe the principal?

Answer 1

(1) Duty of loyalty
(2) Duty of care
(3) Duty of obedience
(4) Duty to act within authority
(5) Duty to disclose information
(6) Duty of good conduct
(7) Duty to account

Question 2

What is the duty of loyalty?

Answer 2

Agent may not, without consent:
(1) Compete with the principal
(2) receive a material benefit that might interfere with the principal’s interests
(3) Act on behalf of a party with interests adverse to the principal

Question 3

What is the duty of care?

Answer 3

Agent has a duty to act with reasonable care, competence, and diligence of a similarly situated agent

Question 4

What is the duty of obedience?

Answer 4

Agent must follow the principal’s lawful instructions and cannot exceed the authority granted by the principal

Question 5

What is the duty to disclose information?

Answer 5

Agent must disclose information that the agent knows or has reason to know the principal would want to know

Question 6

What is the duty of good conduct?

Answer 6

Agent must refrain from damaging the principal’s reputation or business

Question 7

What duties does a principal owe the agent?

Answer 7

(1) Duty to indemnify for any payments made or losses incurred pursuant to the agent relationship
(2) Duty to act in accordance with the terms of any contract between the principal and agent