Which of the Following Is True of an Agent's Duty

question 3

Multiple Choice

Which of the following is true of an agent's duty to obey a principal's instructions?

• A) An agent may always substitute his or her personal judgment for that of the principal.
• B) An agent has no power to exercise his or her best judgment to further the interests of the principal, if no instruction is given.
• C) An agent will be liable for any loss to the principal caused by failure to follow instructions.
• D) An agent has a duty to ignore the principal's instructions if they seem unwise.

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Definitions:

Unsecured Creditors

Creditors who have extended credit without any specific collateral, making them more vulnerable in the event of the debtor's insolvency.

Direct Bankruptcy Costs

Expenses directly associated with the process of filing for bankruptcy, including legal fees, accounting fees, and other related costs.

Corporate Default

Occurs when a company fails to meet its legal obligations or promises, especially regarding the repayment of its debts.

Legal Expenses

Costs incurred by a business or individual for legal services, including lawyer fees, court fees, and other expenses related to legal processes.