What is the primary legal risk for agents?

The primary legal risk for agents stems from their obligation to act in accordance with the principal's interests. This duty is a fundamental principle in agency law, known as the duty of loyalty. Agents must prioritize their principal's objectives and needs above their own or any third party's interests. Failing to adhere to this duty can result in significant legal ramifications, including claims of breach of fiduciary duty, which could lead to financial penalties, loss of license, or damages awarded to the principal. This obligation also encompasses the need for the agent to disclose relevant information, avoid self-dealing or conflicts of interest, and perform tasks with care and competence.

Other potential liabilities such as errors in property assessments, conflicts of interest, or market fluctuations also pose risks, but they do not capture the core fiduciary responsibility that agents have towards their principals as directly as the duty of loyalty does. Thus, the failure to act in the principal's best interests is indeed the most critical risk agents face in their professional practice.