What does fiduciary duty imply in agency relationships?

Fiduciary duty in agency relationships entails an obligation for the agent to act in the best interests of the principal. This foundational principle means that the agent must prioritize the principal's interests above their own and provide loyalty, full disclosure, and care in managing the principal's affairs. The relationship is built on trust, and the agent must avoid any conflicts of interest or self-dealing that may harm the principal.

While the other options touch upon aspects of agency, they do not encapsulate the essence of fiduciary duty. Reporting profits or maintaining a contract are transactional or procedural elements but do not reflect the deeper ethical obligation inherent in fiduciary relationships. The expectation of mutual benefit also does not capture the one-sided responsibility that the agent has towards the principal, which is at the core of fiduciary duty.