LAW 561-002 – Business Associations Fiduciary
fiduciary has an obligation to act in his principal's best interest rather than his own. R3A § 8.01.
The three major duties being a
fiduciary imposes on an agent are loyalty, care, and obedience.
Duty of Loyalty
duty of loyalty flows from the fiduciary nature of the agency relationship and requires, among other things, that the agent:
Account for all profits not promised to the agent.
R3A § 8.02. Refrain from acting as or for an adverse party.
R3A § 8.03. Refrain from competing with the principal.
R3A § 8.04. Refrain from using the principal's property or confidential information for personal purposes.
R3A § 8.05. Disclose relevant information to the principal.
R3A § 8.11. Segregate the principal's property and keep and render accounts.
R3A § 8.12. Act in accordance with a general duty of good conduct.
R3A § 8.10.
Duty of Care
duty of care flows from the parties' implicit assumption that the agent will carry out his duties with reasonable care. R3A § 8.08.
Duty of Obedience
duty of obedience flows from the nature of agency, which requires that the agent be subject to the principal's control. Thus, the agent must act only as authorized by the principal and obey his instructions. R3A § 8.09.
An agent is of course also required to perform any contractual duties owed to the principal.
R3A § 8.07.