What can result from a breach of confidentiality by the agent?

A breach of confidentiality by the agent can lead to the termination of the agency relationship because it undermines the fundamental principle of trust that is essential in any agency relationship. Confidentiality is a core duty of the agent, and breaching this duty can severely damage the principal's position, financial interests, or personal information.

When an agent fails to maintain confidentiality, it creates a risk for the principal, who might face unwanted exposure or the loss of sensitive information. Consequently, the principal has a right to terminate the agency relationship as a remedy for this breach. Maintaining confidentiality is crucial for the integrity of the agent-principal relationship, and a breach signals that the agent is not fulfilling their contractual or fiduciary obligations.

The other options do not accurately reflect the consequences of such a breach. Breaches do lead to enforceable consequences, including termination, whereas an increase in the principal's trust after a breach is paradoxical, as breaches typically erode trust. Legal action against the principal is unlikely in this context, as it is the agent who is at fault for breaching confidentiality.