What is one of the principal's duties to the agent?

What is one of the principal's duties to the agent?

• A. Control of all agent actions
• B. Compensation
• C. Fundamental authority
• D. Unrestricted access to information

Answer: (B)

The principal has a duty to compensate the agent for their services, which is a fundamental aspect of the principal-agent relationship. This obligation ensures that agents are rewarded for their efforts and performance and helps maintain a mutually beneficial working relationship. Compensation can encompass various forms of remuneration, including salary, commission, or bonuses, depending on the nature of the agency agreement. Understanding this duty emphasizes the collaborative nature of agency relationships, where the agent acts on behalf of the principal. While the principal does have a degree of control over the actions of the agent and may grant fundamental authority, these aspects are not inherent duties but rather part of the operational framework of the agency relationship. Unrestricted access to information might be necessary for an agent to perform effectively, but it is not classified as a duty of the principal in the same way compensation is. Thus, recognizing compensation as a primary duty highlights the importance of incentivizing agents to fulfill their roles effectively.

The principal has a duty to compensate the agent for their services, which is a fundamental aspect of the principal-agent relationship. This obligation ensures that agents are rewarded for their efforts and performance and helps maintain a mutually beneficial working relationship. Compensation can encompass various forms of remuneration, including salary, commission, or bonuses, depending on the nature of the agency agreement.

Understanding this duty emphasizes the collaborative nature of agency relationships, where the agent acts on behalf of the principal. While the principal does have a degree of control over the actions of the agent and may grant fundamental authority, these aspects are not inherent duties but rather part of the operational framework of the agency relationship. Unrestricted access to information might be necessary for an agent to perform effectively, but it is not classified as a duty of the principal in the same way compensation is. Thus, recognizing compensation as a primary duty highlights the importance of incentivizing agents to fulfill their roles effectively.