Asked by Marissa Aguilar on Jul 14, 2024
Verified
Which of the following is true of a principal's duty of indemnity?
A) The principal does not have to indemnify the agent for authorized payments made on the principal's behalf as the payments were undertaken in the course of the agent's work.
B) The principal must indemnify the agent for tort damages resulting from authorized conduct that the agent did not believe was tortious.
C) The principal is required to indemnify an agent even for losses resulting from the agent's negligence.
D) The principal is required to indemnify an agent for losses resulting from unauthorized acts so long as the principal did not benefit from such behavior.
Duty of Indemnity
The obligation to compensate for loss, damage, or liability incurred by another, often arising from contractual agreements or the law of agency.
Tort Damages
Tort damages refer to compensation awarded to a person who has suffered loss or harm due to the unlawful act or negligence of another.
Unauthorized Acts
Actions taken by an individual or entity without the necessary permission or authority, often leading to legal consequences.
- Recognize the responsibilities that a principal holds towards their agent, which encompass both indemnification and reimbursement.
Verified Answer
MC
Marissa ChavezJul 18, 2024
Final Answer :
B
Explanation :
A principal may have to indemnify an agent if the agent's authorized acts constitute a breach of contract or a tort for which the agent is required to pay damages to a third party.The principal must indemnify the agent for tort damages resulting from authorized conduct that the agent did not believe was tortious.
Learning Objectives
- Recognize the responsibilities that a principal holds towards their agent, which encompass both indemnification and reimbursement.