The duty of the principal to keep records from which the compensation due to the agent can be determined is reinforced by tax laws that require such recordkeeping.

Question

Quizplus · Accepted Answer

Tax laws indeed require individuals and entities to maintain records that can help in determining the compensation due to agents or employees. This implies that the principal must maintain accurate records of the agent's commissions, bonuses, or other payments to calculate and report the taxable income of both parties correctly. Failure to maintain these records may lead to legal consequences, including penalties, fines, and even an audit.

The Duty of the Principal to Keep Records from Which