Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 21

Facts
Jones had a general power of attorney from Eagle. He gave Eagle's property to his own wife, and they then proceeded to sell the property to a third party. The power of attorney was silent about the right to donate or gift the principal's property. Eagle sued Jones, claiming Jones had breached his fiduciary duty.
At Trial
Eagle's attorney argued that anyone who has a power of attorney knows that a fiduciary relationship is involved and prohibits dealing contrary to the principal's best interests. Jones' attorney claimed that the power of attorney did not specifically prohibit giving the property to one's wife and then selling it. She further argued that Jones should have included this prohibition in the power of attorney when it was given.
Questions
1. Was this a breach of a fiduciary duty?
2. Does it matter that the power of attorney was general?
3. Would it make a difference if the price received was beneficial to Eagle and the proceeds of sale were turned over to Eagle?
4. Does it matter what the relationship was between Eagle and Jones?
5. How should the power of attorney been drafted to cover this situation?