Author Question: Agent's Duties to Principal. Sam Kademenos was about to sell a 1 million life in-surance policy to a ... (Read 136 times)

Anajune7 · **on:** Jun 24, 2018

Agent's Duties to Principal. Sam Kademenos was about to sell a 1 million life in-surance policy to a prospective customer when he resigned from his position with Equitable Life Assurance Society. Before resigning from the company, he had expended substantial amounts of company money and had utilized Equitable's medical examiners to procure the 1 million sale. After resigning, Kademenos joined a competing insurance firm, Jefferson Life Insurance Co, and made the sale through it. Has he breached any duty to Equitable?

Question 2

A principal's major reason for developing agency relationships is to expand business opportunities.
a. True
b. False
Indicate whether the statement is true or false

dantucker · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Agent's duties to principal
Yes. Kademenos has breached his duty of loyalty to Equitable Life. Under principal-agent law, an agent owes a duty of loyalty to the principal, and it is the agent's duty in all dealings affecting the subject matter of the agency to act with the utmost good faith, in loyalty, for furtherance and advancement of the principal's interests. Since Kademenos, as an agent of Equitable, had utilized Equitable's resources in advancing the interests of Equitable, he could not thereafter resign and sell a competitor's policy, since this would be detrimental to his principal. While an agent can normally terminate the relationship with the principal at will, he or she cannot immediately thereafter act contrary to the interests of the former principal by utilizing the principal's resources to the principal's detriment.

Answer to Question 2

TRUE