Duties of an Agent
As per the agency’s contract, the agent has some contractual and fiduciary obligations to the principal. The agent has an inherent obligation to be loyal to the principal, which means that when acting on behalf of the principal, the agent must prioritize and value the principal’s interest and benefits over the agent’s interest. Being diligent, exercising care and caution while acting on behalf of the principal are also part of the fiduciary duties. To maximize the principal’s interest, the agent must also apply the professional knowledge for which the agent was hired. Aside from fiduciary responsibilities, an agent must also execute his or her contractual commitments to the principal. The agent is responsible for keeping the principle up to date on all developments involving the contract or the principal’s interests. The agent must also be able to log in and track the resources spent for the principal’s benefit. In addition, the agent must keep track of the amount of time they spend working on the agency relationship.
Liabilities of an Agent
If the agent commits a wrong with the implicit intent to do so and the act does not assist the principal’s business, the principle will not be held accountable for any tortious obligation. The principal will not be liable for any conduct committed by an agent outside the scope of the agent’s employment that are punishable by law. However, if there is reason to believe that the wrongs committed by an agent are within the scope of the agent’s employment and the principal gave express or implied consent to the wrong, whether through facilitation or participation, the principal will be held liable for any such wrongs committed by the agent.
Duties of a Principal
In place of the fiduciary and the contractual obligation, the principal also must perform the principal’s duty towards the agent. The principal’s duty includes the principal’s obligation to pay the agent for the agent’s services according to the contract terms. The contractual terms will decide the agent’s fee, and the principal must pay the agent for the services that the agent delivers. In addition to this, the principal is liable to make good the costs and expenses that an agent bears. When the agent and principal enter into the agency contract, the principal must indemnify the agent for the losses incurred by the agent while he/she is performing his/her contractual responsibilities. Therefore, the principal cannot sue the agent for the loss incurred during employment and contract unless and until the principal has a reason to believe that the agent is incurring those losses without exercising the prudent and reasonable care that a principal expects an agent to. Until the agent is acting on the contractual obligations, the principal is also accountable for every contract that an agent enters on the principal’s behalf unless and until the principal believes that the agent is not acting as per the principal’s express or implied interest.
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