Duties of Agents and Principals
What are the duties of the Principal to the Agent?
1. Comply with the agreement. (The principal is required to maintain pertinent records, account to the agent, and pay the agent according to the terms of their agreement.) 2. Reimburse reasonable expenses incurred in carrying out the agency agreement.
Described termination by operation of law.
1. Death 2. Insanity/lack of capacity 3. Bankruptcy 4. Breach of fiduciary
What are the duties of the agents to the principal?
1. Fiduciary duty. 2. Duty to follow instructions (duty of obedience). 3. Reasonable care. 4. Accounting. 5. Duty of disclosure. 6. Duty of loyalty.
Describe the four points that fall under duty of loyalty.
1. No competition (can't compete with principal) 2. No conflict of interest. 3. No appropriation of business opportunities. (Insider trading) 4. No disclosure of company information
What is termination by acts parties?
1. Principal has a duty to notify parties about the termination. 2. Agent has a duty to honor the termination.
Where are the duties of the parties upon termination?
1. Termination by fulfillments (agreement is complete). 2. Termination by lapse of time (example real estate listing agreement). 3. Termination of specified events (a wedding planner). 4. Termination by mutual agreement. 5. Termination by unilateral acts of one party ("you're fired or "I quit").
What type of authorities does "termination by operation of law" terminate?
All authorities: express, implied, and apparent.
What is the exception to the grounds for termination?
An agency is coupled with an interest. Meaning that they have invested in the property and that is subject to the matter of the agency relationship.
Describe fiduciary duty and given example.
An agent is a fiduciary, the agent always a supreme duty of loyalty to his or her principal. The agent cannot make a profit at the principals expense. Example an agent preaches his fiduciary duty because he profited on the second sale without disclosing to the owner of the first sale that the second sale was for twice the amount and was already pending.
Typically what contracts need to be in writing?
Contracts of over one year in duration, and contracts under which the agent will have the power to convey interests in real property, such as land, houses, and buildings.
What type of authorities does "termination by acts parties" terminate?
Express and implied authorities only.
Describe duty of disclosure.
The agent should immediately inform the principle of any important information will want to know. Example an agent should inform the principal of a credit customer on the brink of bankruptcy.
