Question

Please provide a short, one paragraph analysis any concerns you have about David in the following situation David, a purchasing agent for Acme Industries, received two tickets from a supplier, Beta Corp., to the upcoming USC v UCLA football game. David routinely authorizes purchases from suppliers including Beta Corp. These tickets sell for over $500 each. What problems, if any, do you see with this?

Answer 1

There is a conflict of interest here for David the agent.

David is an agent for Acme Industries. Two important duties of an agent in conducting the business of agency for the principal are:

• Duty of reasonable care and
• Duty to avoid conflict of interest with that of the principal.

Accepting the tickets from Beta Corp.( which is one of the suppliers to Acme Industries) might make David obligated to place future orders for Acme with Beta Corp., even though Beta Corp. products do not meet the standards specified, or Beta Corp. supplies are erratic. This would cause David to fail in his duty of reasonable care. In other words, Acme could be supplied substandard products, or may not receive the supplies on time, because David chose to accept a couple of tickets from one of the suppliers.

Not only David would be committing breach of duty as an agent, his agency could be terminated by Acme Industries if the latter finds out about the tickets accepted from Beta Corp.