Which duty obligates the agent to act with reasonable care, competence, and diligence, and prohibits gross negligence or intentional misconduct?

• A. Agency
• B. Apparent authority
• C. Duty of care
• D. Ratification

Answer: (C)

The main idea is the duty of care. In agency relationships, an agent must act with reasonable care, competence, and diligence, and they may not engage in gross negligence or intentional misconduct. This standard means the agent should handle tasks as a prudent person would in similar circumstances, focusing on doing the job carefully and skillfully to protect the principal’s interests. Breaching this duty can expose the agent to liability for damages caused by negligence or reckless handling.

Why the other concepts don’t fit: the notion of agency describes the relationship and authority framework, not the specific standard of behavior. Apparent authority concerns how a third party perceives the agent’s authority based on the principal’s representations, not the agent’s duty to exercise care. Ratification refers to the principal approving an agent’s act after the fact, which talks about approval of acts rather than the agent’s ongoing duty to act carefully.