Question

The breach of the fiduciary duty by an agent: a. results in termination of the agent. b. terminates the agent's apparent authority. c. does not terminate an agent's implied authority. d. none of the above

Answer 1

The correct answer is letter "A": results in termination of the agent.

Step-by-step explanation:

Principal-agent relationships are based on a fiduciary duty or, in other words, trust. Principal-agent problems typically arise because principals tend to delegate agents the execution of activities that benefit the principals but not the entity the agent represents. Thus, if the trust between them is broken, principals, as owners of the entity, terminate the agent's contract.