In the scenario with real estate agent Leo Hodgins and his principal Don Cousins, Hodgins discovers a property can only be bought as a package deal and forms a partnership to buy both properties and resell one to Cousins. This action is a breach of which fiduciary duty?
Explanation
This example illustrates a classic breach of the duty of loyalty, which includes the prohibition against self-dealing and making a secret profit. The agent must act in the principal's best interests, which precludes such conflicts.
Other questions
What is the definition of agency as provided in Section 1(1) of the Restatement (Second) of Agency?
In the context of agency law, what does the term 'fiduciary' mean when used as a noun?
What is the primary factor that distinguishes an independent contractor from an employee?
In the case of Alberty-Velez v. Corporacion de Puerto Rico, Victoria Alberty-Velez, a TV host, was paid a lump sum for each episode and provided her own clothing and hairstylist. The court needed to determine if she was an employee or an independent contractor. Which of these facts most strongly favored the classification of independent contractor?
Under the Copyright Act of 1976, when does an employer own the copyright to a work created by an independent contractor?
What is the general rule regarding the legal capacity required to be a principal versus an agent?
What is meant by 'agency by ratification'?
How is an agency by estoppel created?
In the case of Motorsport Marketing, Inc. v. Wiedmaier, Inc., Michael Wiedmaier, who was not an owner, was listed as an owner on a credit application signed by his mother, the actual owner. Motorsport extended credit based on this application. Why did the court find that an agency by estoppel (or apparent agency) existed?
What is the agent's duty of performance?
What is the agent's duty of notification?
Under the agent's duty of loyalty, when can an agent represent two principals in the same transaction?
What does the agent's duty of accounting primarily require?
What is the principal's duty of compensation to the agent?
What is the principal's duty of indemnification?
What does a principal's duty of cooperation entail, particularly in the context of an exclusive agency?
When an agent breaches a fiduciary duty, what remedy allows a principal to recover any benefits or profits the agent secretly retained?
In the scenario where Fran Boller, a real estate agent, was to receive a 6 percent commission for selling Aaron Hart's house, what remedy does Boller have against Hart if Hart sells the house himself to another buyer to avoid paying the commission during the exclusive listing period?
What is required for an agency relationship to be formed by agreement?
In the case of Gossels v. Fleet National Bank, the court found Fleet Bank liable to its principal, Gossels, for a breach of fiduciary duty. What specific action by the bank constituted this breach?
A gratuitous agent (one who acts without payment) is not liable for breach of contract. However, under what circumstances can a gratuitous agent be held liable?
What is the legal implication of the agent's duty of notification under the principle that 'notice to the agent is notice to the principal'?
An agent's duty of loyalty requires that any information or knowledge acquired through the agency relationship be kept confidential. For how long does this duty of confidentiality last?
Which of the following is an example of a principal's duty of reimbursement?
If an agency agreement is silent on the amount of compensation, what is the principal's obligation?
Which of the following is NOT one of the five duties an agent generally owes to a principal?
What is the agent's remedy when a principal and agent disagree on the amount of commissions the agent should have received for sales made?
An agency relationship is created by operation of law in an emergency when the agent's failure to act outside the scope of their authority would cause the principal substantial loss. What is a key condition for this to apply?
In the case of Alberty-Velez v. Corporacion de Puerto Rico, the court determined that Victoria Alberty-Velez was an independent contractor. Which fact, mentioned in the case summary, supported this conclusion regarding tax treatment?
If a principal gives an agent an 'exclusive agency' for a territory, what does the principal's duty of cooperation prevent them from doing?
What are the two main exceptions to the general rule that agency agreements do not need to be in writing?
Under the Copyright Act of 1976, a copyrighted work created by an employee within the scope of their employment is known as a 'work for hire'. Who owns the copyright to such a work?
If a principal fails to perform a contract that an agent lawfully formed with a third party, and the third party sues the agent for damages, what duty does the principal owe to the agent?
What is the agent's duty when acting on behalf of a principal regarding clearly stated and lawful instructions?
In the case of Motorsport Marketing, Inc. v. Wiedmaier, Inc., Motorsport received a check for the first payment on the account from Extreme Diecast, not Wiedmaier, Inc. Why did the court find that this did not negate the apparent agency of Michael Wiedmaier?
When is an agency relationship formed 'by operation of law'?
Which of the following is NOT a right of an agent against a principal?
The IRS has its own criteria for determining employee versus independent contractor status. Since 1997, what has been the primary factor the IRS examiners are encouraged to look at?
In the Gossels v. Fleet National Bank case, Gossels received a check from the German government for 85,071.19 euros. Fleet Bank paid him based on a lower retail exchange rate, resulting in a payment of $81,754.77. This was a breach of the duty of accounting because:
How can an agency relationship be formed through an implied agreement?
Which of the following is an example of an agent's right to indemnification?
According to the case summary of Motorsport Marketing, Inc. v. Wiedmaier, Inc., Motorsport's successful claim for unpaid merchandise was for an outstanding balance of $93,388.58, plus interest and attorneys' fees. This was based on the court finding that:
When are agents NOT entitled to be reimbursed for expenses by their principal?
If an agent is instructed to follow 'all lawful and clearly stated instructions' but the instructions are NOT clearly stated, how can the agent fulfill the duty of obedience?
Which of the following scenarios best describes the formation of an agency relationship?
The Internal Revenue Service (IRS) scrutinizes the classification of workers as independent contractors primarily because:
If a principal provides an agent with an exclusive territory, what is the principal's liability if they violate the exclusive agency by allowing another agent to compete?
An agent who recovers for past services but cannot force the principal to continue the agency relationship is demonstrating what legal principle?
In the case of Gossels v. Fleet National Bank, what was the approximate difference in U.S. dollars between the 'spot rate' offered by Dresdner Bank and the 'retail exchange rate' offered by Fleet for the 84,971.19 euros on October 15, 1999?