GCE Commerce 2023 Theory — Question 8

Model answer

(i) Duty of Loyalty: an agent must act in the best interests of the principal at all times, and must not act in his or her own interests or those of a third party if doing so would harm the principal. (ii) Duty of Care: an agent must act with the care and skill a reasonable person would use in similar circumstances, using best judgement when making decisions on behalf of the principal. (iii) Duty to Obey Instructions: an agent must obey the lawful, ethical instructions of the principal; if an instruction is illegal or unethical, the agent should refuse and inform the principal of the reason. (iv) Duty to Disclose Information: an agent must disclose to the principal all material information relevant to the agent's duties, including business information and potential conflicts of interest. (v) Duty to Keep Accounts: an agent must keep accurate and complete records of all transactions conducted on behalf of the principal, made available to the principal upon request.