Which of the following terms describes the obligations of the agent towards the principal?

The correct term that describes the obligations of the agent towards the principal is fiduciary duties. In the context of agency law, fiduciary duties are legal and ethical responsibilities that require the agent to act in the best interests of the principal. This includes the duties of loyalty, care, and full disclosure. Loyalty means that the agent must put the principal’s interests ahead of their own, while the duty of care requires the agent to perform their responsibilities with a certain standard of skill and diligence. Additionally, full disclosure entails informing the principal of all relevant facts that might affect their decisions.

While agency responsibilities may encompass fiduciary duties, the term "fiduciary duties" specifically highlights the crucial obligation of trust and confidence that is inherent in the agent-principal relationship. Professional ethics refers more broadly to moral principles guiding the behavior of professionals and does not necessarily focus on the specific legal obligations defined within agency relationships. Contractual obligations pertain to the requirements established by a contract but do not solely capture the essence of the trust dynamic between the principal and the agent. Therefore, fiduciary duties is the most precise and accurate term for the obligations an agent has towards a principal.