Discussion Assignment - Agency Law C. There are many duties, including fiduciary
ID: 424568 • Letter: D
Question
Discussion Assignment - Agency Law
C. There are many duties, including fiduciary duties and general duties.
1.Select one duty. Without naming the duty, create a story problem in which an agent (or principal) either does, or does not fulfill the duty. (Frequently more than one duty applies to a situation. Your story may focus on one or more duties.) Provide enough detail that a classmate will be able to read the problem and answer the questions: What type of duty is described? Was the duty fulfilled or breached?
2.State the answer to your story problem
Explanation / Answer
Dreamland properties is a real estate company involved in purchase and subsequent sale of properties, homes and apartments. It identifies real estate available at below the prevailing market rate, purchases the same, further enhances its value and sells it for an excellent profit. The property is identified true personal networking and also obtained through auctions held by banks disposing of properties of individuals unable to repay their mortgage loans. Dreamland properties also operates through various agents in different states in order to have access to a wider area of operation. Dreamland appoints Jack Foster as an agent, for the purpose of identification of properties and representing them during the initial processing of the deal. After being involved in a series of lucrative deals, Jack understands the procedure and realises that the principal is making large profits on every deal. Jack Foster mentions the business and the methodology adopted to complete the transaction, as well as the large profit generated there from, to his uncle who is also involved in the real estate business. When next time Jack identifies an ideal property for purchase by Dreamland, he first informs his uncle, who proceeds to purchase the property and then resales it to Dreamland after making the profit.
In every agency contract, several fiduciary duties along with general duties come into existence as imposed by agency law. The general duties mostly similar to common duties owned by every employee to the employer. The feud usually duties of an agent are created due to existence of a relationship which goes beyond the agreement on the understanding that an agent owes the principal, a duty higher than that enlisted within the contract terms. Has the term employees ID usually duties are based on the crest which is required within such a relationship, beyond what can be controlled by a contract. The fiduciary duty is imposed by law and exists even when it is not mentioned in the contract. Fiduciary duties breached by John in the above scenario can be listed as:
The duty to avoid self dealing. An agent cannot indulgence personal benefit of profiteering from a transaction when is Principal has an interest in the same transaction. John has indulged in self dealing by benefiting himself and his family through a property deal identified for Dreamland.
Duty to preserve confidential information. An agent is usually appointed by a principal to further his business interests and represent him in various capacities, for processing of business transactions. Therefore, it is essential that business strategy as well as other confidential information required to fulfill the purposes and duties expected from the agent, be made available to him. Even information which may be unrelated to the duties and responsibilities of the agent and reveal to him in due course of conversation is brought under the Ambit of the law. The law prohibits an agent from utilising or exploiting this information in any way, as to bring harm to the principal or for personal gain. Agent is free, in the absence of an Express contract, to compete with his former principal in the same business but he cannot utilise information gleaned during his term as agent. This covers information of clients as well as, trade secrets.