Rights and Duties between Principal and Agent

Question 1

What duties are owed from Agent to Principal?

Answer 1

1. any express contractual duties
2. fiduciary duty of loyalty
3. obedience to lawful instructions
4. reasonable care under the circumstances

Question 2

What are principal’s remedies against agent?

Answer 2

1. contract actions (if agent is compensated)
2. tort actions
3. actions for secret profits
4. equitable actions for accounting
5. withholding of compensation for intentional torts or intentional breaches of fiduciary duty
6. terminate the agency prior to termination date in a contract
7. agent’s profits

Question 3

What are the principal’s duties to agent?

Answer 3

1. all duties imposed by K
2. reasonable compensation
3. reimbursement for expenses

Principal should also cooperate w agent and not unreasonably interfere w agent’s performance

Question 4

What is the rule if agency agreement is silent as to agent’s compensation?

Answer 4

Then agent is entitled to reasonable compensation

Question 5

What is a subagent?

Answer 5

“subagent” is a person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent’s principal

Question 6

What is the liability of an agent to principal for acts of subagent?

Answer 6

absolute liability

Question 7

What are duties of sub-agent to principal?

Answer 7

If appointed with proper authority –>
subagent owed principal same duties as agent

If not appointed with proper authority –>
owes no duties to principal, but does owe duties to agent

Question 8

What is duty of principal to sub-agent?

Answer 8

Principal owes no duty to sub-agent, even if properly authorized

Question 9

What are agent’s remedies against principal?

Answer 9

• A compensated agent has the usual K remedies against principal (but has duty to mitigate damages)
• Agent has right to possessory lien for any money due from principal, including compensation for services