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Why must an agent account for money or property received for a principal?

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agency Portrait of Hugo de Groot (Hugo Grotius), oil on panel by the workshop of Michiel Janszoon van Mierevelt, 1631; in the Rijksmuseum, Amsterdam.

An agent must account for money or property received for a principal because the agent occupies a fiduciary position. This relationship is built on power and confidence, requiring the agent to act solely in the interest of the principal.1

In the law of agency, the agent’s primary duties include care, obedience, and loyalty, which are similar to those of a trustee. Because the agent is entrusted to act on the principal's behalf, they are legally obligated to maintain transparency regarding any financial benefits or assets handled during the course of their duties. Failing to account for such property would violate the agent's fiduciary duty, as it would involve prioritizing personal gain or unrevealed interests over the principal's welfare. Ultimately, this requirement ensures that the agent remains faithful to the trust placed in them and prevents the misuse of the principal's resources.23