Duties and Responsibilities of a Principal


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question 1 of 3

Sally is a contractor and hires Steve to paint a client's house on her behalf. Sally tells Steve to buy 3 gallons of White House White paint for the house and gives Steve that money. However, it's not enough paint. Steve has to buy one more gallon in order to complete Sally's request. When Steve seeks reimbursement from Sally, she refuses. Sally has likely breached the duty of:

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1. Sally is a contractor and hires Steve to paint a client's house on her behalf. Sally tells Steve to keep track of his expenses and then bill her at the end of the project. Steve gives Sally a bill for $300, but Sally refuses to pay more than $50. Steve spent almost $200 just on paint, and spent three days on the project. Steve wants to be fairly paid for his work. Sally has likely breached the duty of:

2. Sally is a contractor and hires Steve to demolish a kitchen so she can start building a new one. Steve completes the work, and later finds out the walls contained asbestos. Sally knew this but didn't tell Steve. Sally has likely breached the duty of:

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About This Quiz & Worksheet

When a principal party gives an agent permission to conduct business on their behalf, the principal has certain legal responsibilities in that relationship. Things you should know to pass the quiz on this topic include understanding the responsibilities between a principal and an agent in terms of both indemnification as well as compensation.

Quiz & Worksheet Goals

Test your knowledge of the following principal responsibilities:

  • Indemnification
  • Compensation
  • Good faith and fair dealing
  • Acting according to contract

Skills Practiced

This worksheet and quiz will let you practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on the legal responsibilities of a principal party
  • Interpreting information - verify that you can read information regarding the function of each principal responsibility and interpret it correctly
  • Knowledge application - use your knowledge of a principal's legal responsibilities to an agent to answer questions about agency relationship scenarios

Additional Learning

To learn more about what the responsibilities are between a principal and its agent, review the corresponding lesson on the Responsibilities of a Principal in Law. This lesson covers the following objectives:

  • Learn what fiduciary duty means
  • Define agency relationship
  • Know the legal responsibilities of the principal party in an agency relationship
  • Understand examples of the role each principal responsibility plays in the agency relationship process