Duties of Agents and Principals in Agency Law

The video tutorial explains the principal-agent relationship, detailing the duties each party owes to the other. Principals must compensate, reimburse, indemnify, and prevent harm to agents. Agents owe loyalty, obedience, accounting, and care to principals. These duties ensure a balanced and effective working relationship.

Under what condition is a principal expected to compensate an agent?

• When the agent acts independently

• When the agent acts without the principal's knowledge

• When there is a mutual understanding of compensation

• When the agent incurs lavish expenses

Which type of expenses should a principal reimburse an agent for?

• Lavish personal expenses

• Reasonable expenses incurred on behalf of the principal

• Expenses incurred without the principal's consent

• All expenses regardless of necessity

What does the duty of indemnification entail for a principal?

• Paying for the agent's personal expenses

• Covering damages incurred by the agent while acting on behalf of the principal

• Providing a bonus to the agent

• Ensuring the agent's personal safety

What is the primary role of a principal in a principal-agent relationship?

• To hire or contract with the agent

• To compete with the agent

• To act independently of the agent

• To represent the agent's interests

What is the duty of loyalty for an agent?

• To act in the principal's best interest

• To compete with the principal

• To ignore the principal's instructions

• To prioritize personal gain over the principal's interests

How should an agent handle any value received on behalf of the principal?

• Keep it for personal use

• Report and account for it to the principal

• Ignore it

• Use it to compete with the principal

What does the duty of care require from an agent?

• To act as a reasonable person would

• To prioritize personal tasks over the principal's

• To act recklessly

• To disregard the principal's interests