Duties Owed by a Hawaii Agent to Its Principal

In Hawaii, a Hawaii agent and principal relationship is created either by a written agreement or the conduct of both parties. If it exists the agent is subject to various duties owed to the principal including, but not limited to the following:

  • Duty of Care and Competence – a paid agent is required to act with care and skill which is standard in the locality for the kind of work which he is employed to perform and in addition, to exercise any special skill that he or she has.
  • Duty to Provide Information – an agent is required to use reasonable efforts to give his or her principal information which is relevant to affairs entrusted to him or her and which, as the agent has notice, the principal would desire to have and which can be communicated without violating a superior duty to a third person.
  • Duty to Act Only Within the Scope of Actual Authority – an agent is required not to act in the principal’s affairs except in accordance with the principal’s manifestation of consent.
  • Duty of Good Conduct – an agent is required to not conduct himself or herself with such impropriety that he or she brings disrepute upon the principal or upon the business in which he or she is engaged.
  • Duty of Loyalty – an agent is required to act solely for the benefit of the principal in all matters connected with his or her agency. The agent’s duty is not only to act solely for the benefit of the principal in matters entrusted to him or her, but also to take no unfair advantage of his or her position in use of information or things acquired by him or her because of his or her position as agent or because of the opportunities which his or her position affords.
  • Duty to Exercise Good Faith – when an agent’s agreement with a principal confers discretion on the agent to take action in the agent’s sole discretion, the agent has a duty to exercise the discretion in good faith.

A Hawaii agent’s breach of fiduciary duty may create several distinct bases on which the Hawaii principal may recover monetary relief or receive another remedy. However, damages is an essential element in a claim for breach of fiduciary duty. If the Hawaii principal has suffered no damages as a result of the Hawaii agent’s breach, then the Hawaii court will be unable to grant relief to the principal.

As you can see, whenever you are entering or are planning to enter into an agent and principal relationship, you should be aware of the duties that you are owed. They should be addressed in a written agreement with your principal or agent.

Contact us today and we can help you review your proposed agreement so you understand what duties, if any, you owe as agent, or are owed to you as principal.

More Articles on Hawaii Corporate and Business Law

Contact Our Practice

Mon-Fri: 8am - 4:30pm
Sat: 8am - 12pm