This is an extract of our Rights And Duties Between Principal And Agent document, which we sell as part of our Agency and Other Unincorporated Businesses Outlines collection written by the top tier of Oklahoma City University School Of Law students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Agency and Other Unincorporated Businesses Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:
RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT A. Duties of Principal to Agent It is the agent who is the active party in the relationship, the party in whom the trust is placed.
An Agent is a fiduciary
1. Duty of Exoneration and Idemnification ADMIRAL ORIENTAL LINE V. UNITED STATES (very important) Admiral was employed by Altantic Gulf which was an agent of the U.S. in operation of a ship. Admiral was sued by Elkton's Cargo owners & won but spent a lot &
claims that was paid as an expense of operating as Atlantics Agent. Atlantic tried bring in U.S. claiming U.S. Principal of whole deal & thus had to pay Atlantic for any expenses it had in defending suit but also any expenses lobbied against it by a "sub-agent"
Rule: The Venture Is The Principals, and that, as the profits will be his, so should the expenses!
An agent, compelled to defend a baseless suit, grounded upon facts performed in his principals business, may recover from the principal the expense of his defense. The general doctrine is that an agent may recover any expenditures necessarily incurred in the transaction of his principal's affairs.
Rest. 3rd SS8.14 comment B, recognizes a limitation on the indemnity principle: "a principal's duty to indemnify doesn't extend to losses that result from an agents own negligence, illegal acts, or other wrongful conduct"
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