What must an agent demonstrate to fulfill their duty of loyalty?

To fulfill the duty of loyalty, an agent must prioritize the interests of their principal above their own. This fundamental principle ensures that the agent acts in good faith and with integrity, refraining from any behavior that would benefit themselves at the expense of the principal. The duty of loyalty requires the agent to avoid conflicts of interest and to promote the principal’s best interests in all dealings.

While regularly updating the principal on market trends, offering competitive rates to clients, and obtaining the best deals in transactions are valuable practices that can enhance the overall relationship between the principal and agent, they do not inherently capture the essence of the duty of loyalty. These actions may reflect competence and diligence, but they do not specifically address the need for the agent to prioritize the principal’s needs over their own personal gain. Thus, the correct answer emphasizes the core obligation that solidifies the trust inherent in agency relationships.