Define: Gratuitous Agent

A gratuitous agent is an individual who acts on behalf of another without expectation of compensation or remuneration, typically performing voluntary or charitable services.

The key distinction is that a gratuitous agent acts without expectation of payment, while a paid agent (such as an employee or contractor) receives compensation for their services.

Gratuitous agents owe fiduciary duties to act in the best interests of the principal, exercise reasonable care and skill, avoid conflicts of interest, and comply with instructions, unless contrary to law or public policy.

Yes, a gratuitous agent can be held liable for negligence or misconduct in performing their duties, subject to the same legal standards of care and liability as paid agents.

Gratuitous agents may be entitled to reimbursement for reasonable expenses incurred in the performance of their duties, although reimbursement is typically limited to actual expenses and does not include compensation for time or effort.

Yes, a gratuitous agent can typically terminate their agency relationship at any time, although they may have obligations to notify the principal and take reasonable steps to avoid harm or disruption to the principal’s interests.

If a gratuitous agent breaches their fiduciary duties, they may be liable for damages resulting from their misconduct, and the principal may have legal remedies such as suing for breach of contract or seeking injunctive relief.

Gratuitous agents generally have the authority to bind the principal to contracts or obligations if they act within the scope of their authority and the principal ratifies their actions, although there may be limitations based on the nature of the agency relationship.

While agency relationships with gratuitous agents may be informal, it is advisable to establish clear expectations, scope of authority, and instructions to avoid misunderstandings or disputes.