Restatement (Third) of Agency · Section § 3-11
This section addresses the duties of agents towards their principals, detailing the obligation to act with care, competence, and diligence.
Source: Restatement Restatement (Third) of Agency § § 3-11
An agent has a duty to act with care, competence, and diligence when making decisions for the principal.
Agents must perform their tasks in a careful and competent manner, using appropriate skill and diligence to fulfill their roles effectively. This obligation helps protect the interests of the principal and ensures that the agent acts in accordance with the expectations of their relationship.
An agent's duty of care is measured against the standard of a reasonable person in similar circumstances.
The duty of competence implies that agents should possess the necessary skills and knowledge relevant to their tasks.
Illustration 1
If an agent is managing a real estate transaction, they must utilize their expertise to avoid negligence when drafting contracts.
Illustration 2
An agent for a corporation engaging in mergers must apply appropriate industry knowledge to ensure informed decisions that benefit the corporation.
This case illustrates the significance of an agent's duty of care, emphasizing that agents must act with a level of proficiency expected in their professional capacity.
Understanding an agent's duty to act with care and competence is crucial for both agents and principals in establishing effective relationships. Failure to meet this duty can lead to liability and damages for the agent, as well as financial and reputational harm to the principal.