Agent's Duties to the Principal

This page includes a writing template for analyzing this topic and usage notes to guide its application. In general, the template is designed to serve as a starting point for your analysis. It should be adapted to fit the specific facts of your case and your professor’s preferences.

Writing Template

Issue

I: The issue is whether Agent breached any of the duties owed to Principal.

Analysis

R: Agents owe principals the duties of (1) loyalty, (2) reasonable care, (3) obedience, and (4) notification and counting.

1. Duty of Loyalty

R: In general, the duty of loyalty requires the agent to act solely in the principal’s best interests, avoiding conflicts of interest, and refraining from engaging in any conduct that would be adverse to the principal’s interests.

A: Here, [apply rule to facts].

C: Therefore, Agent [breached/did not breach] their duty of loyalty to Principal.

2. Duty of Reasonable Care

R: The duty of reasonable care requires the agent to act with the same level of care, competence, and diligence that a reasonably prudent person would exercise in similar circumstances. The agent must perform their duties with the skill and care customary for someone in the same role or profession, taking into account any special knowledge or skills the agent has.

A: Here, [apply rule to facts].

C: Therefore, Agent [breached/did not breach] their duty of reasonable care owed to Principal.

3. Duty of Obedience

R: The duty of obedience requires the agent to follow all lawful and reasonable instructions provided by the principal concerning the scope and performance of the agency relationship. The agent must act within the authority granted by the principal and may not deviate from the principal’s directives unless authorized to do so or in circumstances where deviation is necessary to protect the principal’s interests.

A: Here, [apply rule to facts].

C: Therefore, Agent [breached/did not breach] their duty of obedience to Principal.

4. Duty of Notification

R: The duty of notification requires the agent to promptly inform the principal of any material information or developments relevant to the agency relationship. This includes facts that the agent knows or should reasonably know are important to the principal’s interests or decisions.

A: Here, [apply rule to facts].

C: Therefore, Agent [breached/did not breach] their duty of notification owed to Principal.

5. Duty of Accounting

R: The duty of accounting requires the agent to keep the principal’s property separate from their own. Additionally, the agent has a duty to maintain and render an accurate accounting of the principal’s money and other property.

A: Here, [apply rule to facts].

C: Therefore, Agent [breached/did not breach] their duty of accounting owed to Principal.

Conclusion

C: Therefore, Agent [breached/did not breach] duties owed to Principal.

Principal's Remedies

R: A principal may seek recovery for (1) the agent’s breach of fiduciary duty, (2) failure to fulfill contractual obligations, (3) actions exceeding the agent’s authorized scope of employment, and (4) conduct giving rise to a tort claim. The principal may pursue one or more remedies, which include: (i) seeking an injunction to prevent further harm, (ii) filing a breach-of-contract claim to recover damages, (iii) pursuing a tort claim for harm caused, including potential punitive damages, (iv) avoiding or rescinding a contract or transaction entered into by the agent, (v) obtaining restitution for losses incurred, (vi) requiring an accounting for the value of any unauthorized use of the principal’s property, (vii) terminating the agency relationship, (viii) reclaiming commissions or other compensation, and (ix) recovering profits earned by the agent without the principal’s consent.

A: Here, [apply rules to facts].

C: Therefore, Principal [may/may not] recover for Agent’s breach.

Duty of Loyalty Note

In the template above, the general rule for the the duty of loyalty is provided. Within this general duty, there are several specific duties that you may wish to include in your analysis. The specific duties of loyalty are enumerated below.

R: Specifically, the agent’s duty of loyalty includes: (1) The agent has a duty not to deal with the principal as an adverse party; (2) The agent must refrain from acquiring a material benefit from a third party that arises out of the agent’s position or actions on behalf of the principal; (3) The agent is prohibited from usurping a business opportunity that properly belongs to the principal; (4) The agent has a duty not to compete with the principal during the course of the agency relationship; (5) If an agent represents multiple principals, they have a duty to disclose conflicts of interest that may arise between those principals; and (6) The agent has a duty not to use or disclose the principal’s confidential information for purposes outside the scope of the agency.

Usage Notes

JurisJotter templates synthesize legal principles into a practical format that supports the development of well-structured, point-rich analyses in a timed exam.

The template features (1) headers identifying the overall issue, analysis, and conclusion. If the analysis begins with an umbrella rule that identifies elements, factors, or steps of the analysis, it will be followed by subheaders that signpost the analysis of each component.

The template also features (2) IRAC labels at the beginning of each paragraph. These headers and labels are included for educational purposes, offering guidance on structuring your analysis. Your usage of the headers is optional but can be helpful to readers. We advise against including the IRAC labels in submitted work.

The templates serve as a general guide for writing and should be adapted to align with (1) your specific factual circumstances and (2) your professor’s preferences, particularly if your professor provides explicit formulations of rules or analyses. For example, you may add or subtract an element or modify its language. Regardless of whether your professor provides explicit formulations, (3) this template will assist you in crafting point-rich analyses.

Please note that these templates are writing aids and not finished products. They are efficiently designed for exam essays to demonstrate conceptual understanding; thus, they are not comprehensive outlines with historical context or dicta.

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