Question

a. What is a fiduciary? b. What are the implication of an agent's fiduciary obligation? What is an agent prohibited from doing as a result of this obligation? Explain.

Answer 1

Answer- a. A fiduciary is someone who acts for someone else's benefit while placing their own interests secondary to that person's interests. A fiduciary relationship is one of utmost trust and confidence, loyalty and good faith. Answer- b.

An agent must always act in a way that benefits the principal and not in a way in which the agent benefits to the detriment of the principal. An agent may not represent the principal in any transaction in which the agent has a personal interest without full disclosure. An agent cannot compete with the principal or act on behalf of a competitor. An agent is prohibited from doing anything that provides the agent a secret profit. An agent cannot represent a buyer and a seller, without the buyer and seller having knowledge of and agreeing to the agent's dual role. An agent must disclose to the principal business opportunities the agent learns of that are within the scope of the principal's business. An agent may not use or disclose confidential information obtained during the agency for the agent's own benefit or contrary to the principal's interest.