Rights and duties of the agent
Rights of the agent
- Right to compensation: The principal is generally obligated to provide compensation for the agent’s work.
- Right to reimbursement: Agents have the right to be reimbursed for reasonable expenses incurred while carrying out their duties on behalf of the principal.
- Right to indemnification: Agents have the right to be protected by the principal from any legal liabilities or losses that may arise as a result of the agent’s authorized actions performed in good faith and within the scope of their authority.
- Right to follow instructions: Agents have the right to expect that the principal’s instructions will be lawful and clear. Agents can also expect the principal to provide the necessary information and resources for them to fulfill their duties effectively.
Duties of the agent
- Duty of loyalty: Agents owe a duty of loyalty to the principal, meaning they must act in the best interests of the principal and avoid conflicts of interest.
- Duty of care: Agents must exercise reasonable care and skill when carrying out their responsibilities.
- Duty of good faith: This duty includes being truthful and transparent with the principal and not engaging in deceitful or fraudulent activities.
- Duty to account: They must provide an account of their actions and financial dealings when requested by the principal.
- Duty to notify: Agents have a duty to promptly notify the principal if they become aware of any information that could affect the principal’s interests or the agency relationship. This includes disclosing any conflicts of interest.
Rights and duties of the principal
Rights of the principal
- Right to expect performance: Principals have the right to expect that the agent will perform their duties within the scope of their authority and in accordance with the terms of the agency agreement.
- Right to receive accountings: Principals have the right to request and receive regular accountings from the agent regarding the agent’s activities and transactions conducted on the principal’s behalf.
- Right to control: Principals have the right to control the agent’s actions within the limits of the agent’s authority. They can provide instructions and make decisions that the agent is obligated to follow.
- Right to terminate: Principals generally have the right to terminate the agency relationship at any time, as long as it does not violate the terms of the agency agreement or any applicable laws.
Duties of the principal
- Duty to compensate: The principal is generally responsible for compensating the agent for their services, as outlined in the agency agreement or contract. Failure to provide agreed-upon compensation can lead to a breach of contract.
- Duty of good faith and fair dealing: Principals are expected to deal with the agent in good faith and fairly. They should not take actions that undermine the agent’s ability to perform their duties or unreasonably interfere with the agency relationship.
- Duty to provide information: Principals must provide the agent with all necessary information and resources required for the agent to carry out their responsibilities effectively. This includes disclosing relevant facts and circumstances.
- Duty to honor the agency agreement: Principals must adhere to the terms and conditions of the agency agreement. They should not unilaterally change the agent’s authority or responsibilities without the agent’s consent, unless such changes are allowed by the agreement.