Question

Marshall is a purchasing agent for DigitoolArt Corporation. His duties require him to negotiate and execute contracts to purchase office supplies and equipment for the corporation. Assume that Bronson, a computer sales representative, pays Marshall a $20,000 kickback to purchase from him computers needed by DigitoolArt Corporation. What breach of the duty of loyalty has Marshall committed here?

A) competing with the corporation
B) making a secret profit
C) self-dealing
D) usurping a corporate opportunity

Answer 1

Marshall has breached his duty of loyalty to DigitoolArt Corporation by making a secret profit from a kickback, compromising his obligation to act in the corporation's best interest.

Step-by-step explanation:

Marshall has committed the breach of duty of loyalty known as making a secret profit. In this scenario, by accepting a kickback from Bronson, Marshall has violated his duty to act solely in the best interests of DigitoolArt Corporation. The duty of loyalty requires an agent to avoid situations where a conflict of interest might compromise the agent's ability to act in the best interests of the principal (in this case, the corporation).

Rather than seeking the best deal for DigitoolArt Corporation, Marshall allowed his decision to be influenced by a personal financial gain, which stands in direct conflict with his obligations to the corporation.