Lesson: Duties Owed by a Principal to an Agent

In this lesson, Nick Palazzolo, CPA, dives into the responsibilities that a principal has towards an agent, beginning with the obligation to provide compensation unless the agent has volunteered to act without pay. He clarifies the nuances of such gratuitous arrangements and contrasts them with the predominant compensated agency relationships. Nick also touches on reimbursement and indemnification, detailing scenarios where a principal must cover reasonable expenses incurred by an agent in the course of their duties. The lesson is packed with practical examples, including his personal experiences, to illustrate how these rules apply in real-world situations, and notes the importance of clear agreements to prevent misunderstandings around financial responsibilities.