Rights and Duties of Parties to an Agency Relationship

Question 1

What are P’s rights?

Answer 1

Control of A
-> right to control A’s acts on P’s behalf

Notice /accounting
-> P is entitled to notice of all relevant issues
AND
-> an accounting of property or funds used on behalf of P

Question 2

What is A’s duty of care?

What is A’s duty of loyalty/obedience?

Answer 2

A must follow P’s instructions and perform duties, tasks, and transactions with reasonable care, diligence, and judgment.

A should avoid acts in A’s self-interest in agency matters and refrain from secretly profiting from transactions on behalf of P.

Question 3

What are the duties P owes to A?

Answer 3

Deal fairly and in good faith per the K terms
-> provide A with information concerning risks of physical or financial harm/loss that P knows but A does not

Duty not to injure A’s business reputation

Compensation
-> if P expressly or impliedly agreed to pay A

Duty not to interfere
-> with A’s completion of agency work

Duty to indemnify
-> against pecuniary loss suffered in connection with agency relationship and within scope of A’s actual authority

Question 4

When does P not owe a duty to indemnify A?

Answer 4

No duty for A’s negligence or illegal or wrongful conduct.

Question 5

What are P’s remedies for breach by A?

Answer 5

Remedies are
-> injunction
-> breach of K action
-> tort action
-> rescission
-> restitution
-> accounting
-> termination of agency
-> relationship
-> forfeiture of compensation
OR
-> disgorgement

Question 6

What are the rights of A?

Answer 6

They are
-> compensation
-> not have P interfere
-> indemnificaiton/reimbursement
-> safe work environment
AND
-> contract or tort remedies

Question 7

What are the duties A owes to P?

Answer 7

Duty of loyalty
-> to act solely for the benefit of P (whether A is compensated or gratuitous)
-> including not dealing with P as an adverse party without P’s knowledge
-> not accruing a material benefit in actions on P’s behalf
-> not usurping business opportunities or competing with P
AND
-> not using P’s confidential information

Performance-based duties
-> contractual duties
-> duty of care/diligence normally exercised by A in similar circumstances
-> duty of obedience
-> duty to provide relevant information and accounting
AND
-> no commingling of accounts