What does the "duty of loyalty" entail?

The "duty of loyalty" is a foundational principle in agency law that emphasizes the agent's obligation to prioritize the interests of the principal above their own. When an agent undertakes to represent a principal, they are expected to act in a manner that is solely focused on furthering the principal's objectives and safeguarding their interests. This includes avoiding conflicts of interest, not engaging in self-dealing, and refraining from taking any actions that could disadvantage the principal or benefit themselves at the principal's expense.

In this context, option B accurately captures the essence of the duty of loyalty. It highlights that the agent's primary obligation is to maintain loyalty to the principal, ensuring that their actions align with the expectations and interests of the principal they represent.

The other options do not reflect the duty of loyalty accurately: one suggests independence from the principal, another promotes self-interest over the principal's, and the last implies a requirement to share profits that does not necessarily fall under the duty of loyalty. Therefore, option B is the correct understanding of the duty of loyalty within the agent-principal relationship.