Why must an agent avoid making a secret profit from a transaction?

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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 avoid making a secret profit because they occupy a fiduciary position, which requires them to act solely in the interest of their principal.12

Because an agent is entrusted with power and confidence regarding the principal's affairs, the law imposes a duty of loyalty similar to that of a trustee. Consequently, an agent is ethically and legally obligated to account for any financial benefit derived from a transaction. Retaining a secret profit constitutes a violation of this fiduciary duty, as it represents an unrevealed interest that is adverse to the principal’s own interests. To maintain the integrity of the agency relationship, the agent must prioritize the principal's benefit above their own personal gain in all dealings.12