What happens if the agent breaches their duty?
The principal can potentially be subject to various damages if the agent breaches the duties owed to the principal. Some of these remedies include:
Compensation withholding – The principal has the ability to refuse payment to the agent acting on their behalf if the agent has breached their duties to the principal or has acted negligently.
Contract damages – Contract damages may be collected by the principal if the agent has been already compensated.
Kickbacks – If the agent received secret profit sharing from the deal entered into, the principal will have the right to recover those profits.
Tort damages – The principal will be able to obtain the damages performed by the agent whether the agent acted either negligently or intentionally.
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What are an agent’s duties to the principal?
There are several key responsibilities an agent has with respect to the principal. This includes the duty of loyalty, duty to act in accordance with the express and implied terms of a contract, duty of care competence, and diligence, duty of good conduct, and duty to comply with the principal’s lawful instructions.
What is an agency relationship?
An agency is defined as a legal relationship in which one individual (or entity) appoints a separate individual (or entity) to act on their behalf.
How is an agency contract or relationship formed?
Generally, there isn’t a formal process to form an agency relationship. Thus, an agency agreement can be made orally or written. However, an exception to this rule is the statute of frauds which will require that an agency contract be made in writing if it cannot be performed within one year from the time that […]