BLS 342 Exam 4 (Final) 6

BLS 342 Exam 4 (Final) 6 - What are the duties of a...

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What are the duties of a principal to an agent and of an agent to a principal? Agent’s duty to Principal (as a matter of law) o Duty of Obedience – agent’s duty to principal (as a matter of law) Agent must obey those directions of the principal and only act within that authority No unauthorized acts Can’t improperly delegate that authority Can’t commit torts o Duty of Diligence – must exercise reasonable care and skill o Duty to Inform – when the agent finds out something that pertains to the principal the law assumes the principal knows at exactly the same time Agent needs to tell the principal as quickly as possible “Deemed given to the principal” o Duty to Account – must account for whatever he/she receives or spends of the principal’s money or property, no commingling (one pocket for his money, one for principal) Agent may come into possession of objects that belong to the principal Trust Accounts (can’t put client’s money in your own account) o Fiduciary Duties – a person who is in a position of trust with regard to someone else’s money or property Shouldn’t have conflicts of interest Shouldn’t enter into competition with principal Can’t share confidential information that it gets from its principal Can rat out if it is illegal Must account for financial benefits that you might receive being an agent Example: purchasing agent Must account for things you receive (i.e. gifts) to the principal Duties of Principal to Agent o Duty of Compensation Employer | Employee Principal has duty to pay the agent o Duty of Reimbursement -- agent has expenditures during the time fulfilling the duty that the agent would normally make o Indemnification – The agent, when performing their legitimate duties, sustains legal losses (money a person pays out when they’ve been sued), after paying out the Principal will have to pay the legal losses Duties of agent to principal 1. Duty of loyalty – act in interest of agent 2. Duty of notification – have to communicate all contracts and info agent enters into 3. Duty of performance – must perform duties specified in the agreement and must perform them with reasonable skill and care as a reasonable person would 4. Duty of obedience – must follow lawful instruction and direction of the principal
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BLS 342 Exam 4 (Final) 6 - What are the duties of a...

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