Which duty requires the agent to act with reasonable care, competence, and diligence?

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

Answer: (A)

Agents owe fiduciary duties to principals, and one essential obligation is the duty of care, which requires the agent to act with reasonable care, competence, and diligence. This means the agent must perform tasks with the care a reasonably prudent person would use in similar circumstances, applying the necessary expertise and avoiding negligence. The duty of care protects the principal by ensuring the agent uses appropriate skill and effort to advance the principal’s interests, whether handling a transaction, managing information, or making recommendations.

The other concepts describe different ideas: apparent authority concerns how a third party perceives the agent’s authority based on the principal’s representations or conduct, not the standard of care the agent must meet; estoppel prevents properly denying rights when one party’s misrepresentation or reliance would cause another to act to their detriment; and agency refers to the relationship itself, not a specific duty.