What can result from an agent's breach of duty in an agency relationship?

In an agency relationship, when an agent breaches their duty, it can lead to significant consequences, particularly in terms of financial liability and the potential loss of the principal's business. The agent has a fiduciary obligation to act in the best interests of the principal, uphold loyalty, and ensure transparency. A breach, such as failing to disclose critical information or acting in a manner contrary to the principal's interests, can lead to direct financial losses for the principal. This financial liability may include compensatory damages or even punitive damages if the breach is severe enough. Furthermore, trust is foundational in agency relationships; once lost, it can lead to the principal terminating the agreement, resulting in a detrimental impact on the agent's career and reputation.

The other potential answers do not accurately reflect the likely outcomes of such a breach. Increased trust from the principal is not a logical outcome of a breach. Immediate termination of the agent's license, while possible in cases of serious misconduct, is not a guaranteed response to every breach of duty. Lastly, the suggestion that there would be no significant impact on the agent’s career undermines the serious nature of fiduciary duties and the potential ramifications resulting from failing to uphold these responsibilities.