Future Business Leaders of America (FBLA) Business Law Practice Exam

What is termed as the situation where an agent works for two competing principals simultaneously?

1. Double representation

2. Conflicted representation

3. Multiple agency

4. Joint representation

The correct answer is: Double representation

The correct term for a situation in which an agent represents two competing principals simultaneously is "multiple agency." This concept arises in agency law when an agent has obligations to multiple clients, which can lead to conflicts of interest. It is crucial for the agent to disclose such relationships to all parties involved to ensure transparency and ethical conduct. In this context, "double representation," while it may sound relevant, is not the standard term used in legal discussions about agency conflicts. "Conflicted representation" is more of a descriptive term rather than a defined legal concept. Similarly, "joint representation" typically refers to representing multiple clients in a single matter that does not involve direct competition, which is not applicable in this scenario. Understanding "multiple agency" is critical as it highlights the potential ethical dilemmas that can arise when an agent tries to serve competing interests, underscoring the importance of clear communication and consent from all parties involved.