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Business Associations

Agency: Duties

Updated 1/4/2024 PG

As you may be beginning to realize, agency and authority can be very fact specific questions. Agency relationships introduce great risk for both parties involved. The agent is being asked to carry out acts on behalf of another person. What if the agent is injured? What if the agent must incur an expense to complete the assigned tasks? Similarly, the principal is placing trust in another person to act on his or her behalf. What if the agent reveals the principal's confidential information? What happens if the agent is a double-agent actually working for the principal’s arch-nemesis in disguise? 

The law controls these risks by imposing legal duties—  standards of conduct that each party must abide by when engaged in the agency relationship. Let us look at the legal duties agents and principals owe each other.