Agency Law
Print this article
Font Size
Agent’s Duties
View ArticleView Article Comments
Agents, whether you’re acting like James Bond, or as a real estate agent, sales agent, literary agent, or even an NFL agent, have duties to their principal. And in turn, the principal has duties to the agent. So, it’s a two-way street where the agent and principal have duties to each other. These duties are generally known as fiduciary duties.

The agent’s duties to the principal include to:

  1. act within the confines of the law
  2. act with reasonable care
  3. maintain loyal to the principal
  4. disclose any material information to the principal
Agents must act in the best interests of their principals, but cannot break the law to do so. However, sometimes if an agent breaks the law on behalf of the principal, the principal can be held liable for the agent’s acts. Agents must also act reasonable like a prudent person would act. What’s reasonable is often determined on a case-by-case basis.

Agents must maintain loyalty to the principal and take advantage of the agency relationship for the agent’s personal benefit. For example, if the principal gave the agent a limousine to drive the principal’s friend to the airport, the agent could use that limo to take his or her friends out to a party. That action would be outside the scope of the agency relationship and break the agent’s duty of loyalty to the principal. Also, agents must disclose important material information to the principal. For example, if the agent learns that the principal’s friend became ill, the agent must inform the principal.

The principal’s duties to the agent generally include to:

  1. pay the agent
  2. reimburse the agent for reasonable expenses
The principal must pay the agent for the agent’s work and reimburse the agent for reasonable expenses associated with the agency relationship.  Reasonable expense include those expenses that are generally required to complete the project(s), which can vary depending on the particular facts of the agency relationship.