The Duties of an Agent to Principal

THE DUTIES OF THE AGENTS TO PRINCIPAL The duties of an component depend primarily on the contract of agency if there is one. hooked to any such(prenominal) express terms, the doer owes a number of implied duties or obligations to his brain. It is the agency relation transmit as such that pass ons rise to these obligations so that, as a general rule, they f wholly as much on the gratuitous instrument as on the paid gene. 1. Obey the adepts instruction manual segmentation 164 states, The agent mustiness obey the instructions given to him by his booster cable even if he thinks the instructions are wrong.Sometimes of course the genius may expect the agent to advise him and indeed he may be employing an agent to use attainment and care. The agent must non delegate his debt instrument to other person unless such delegation has been concur with the atomic number 82, or is the custom of the trade, or the delegation merely takes mistreat in relation to purely administr ative matters. Case fashion model In Turpin v. Bilton (1843), an insurance broker agreed for consideration to obtain a contract of insurance on the plaintiffs ship. But he failed to do so. The ship was lost and the broker was held liable to the plaintiff.In Fraser v. B. N. Furman (Production) Ltd (1967), insurance brokers agreed for consideration to effect an employers liability policy and failed to do so. The employer was held liable for $3000 damages in an action brought against him by an employee for breach of the Factories Act, and the homage of Appeal held that the brokers must indemnify the employer in that sum for breach of contract. Betram Armstrong & Co. V. Godefray (1830) 1 Knapp 381 Facts The agent was a stockbroker. The wizard told the agent to sell stock when the market price reached a certain figure per unit of stock.The agent did not heed these instructions and held on to the stock. When the market dropped the agent was forced to sell at a loss. Decision The pri ncipal successfully sued the agent to recover the difference amidst the price at which he was instructed to sell the stock and the price at which the stock was eventually sold. 2. A duty to exercise valid skill and diligence Section 165 states, The degree of skill and diligence indispensable of an agent depends on whether the person is a gratuitous agent or a non-gratuitous agent. A gratuitous agent is not paid for their services whereas a non-gratuitous agent is paid.A non-gratuitous agent is required to exercise a degree of skill equal to that which a reasonable person would expect an agent of that type to exercise. For example, a real commonwealth agent is expected to display the qualities and expertise of a competent real state agent. If the agent fails to sports meeting this standard, the agent depart be liable to the principle for any loss ca apply by this breach of duty. A gratuitous agent is not expected to exercise any circumscribed degree of skill. The agent must ex ercise the same degree of care and diligence as they would use in attending to their pro song affairs.If that person has nigh special knowledge, they are expected to use that knowledge. Case Example In Keppel v. bicycler (1927), agents were employed to sell a block of flats and received an offer from one party which was accepted study to contract. The agents later received a higher offer but, instead of telling the avouchers, arranged a resale from the earlier party to the later later the original sale to the earlier party was effected. It was ruled that the agents had acted in breach of their duty to obtain the best price available, and that duty included passing on expatiate of better offers until a binding contract was concluded. . To render proper accounts when required Section 166 states, An agents owes a duty to the principal to keep proper accounts and make them available for inspection. For example, travel agents and real estate agents are required by statute to keep accurate and proper accounts. This duty imposes an obligation on agents to keep their position and money separate from that of their principal. Case Example In Harry Parker Ltd v Mason 1940 2 KB 590, where the principal conspired ith agent to make shame bets on the course and bets with street bookmakers contrary to the existing lawfulness but agent had failed to apply, as agreed the money that the principal handed to him. The Court of Appeal held that the principal could not recover it from agent on the general principal that money paid under an extralegal contract is irrecoverable. 4. To pay his principal alls sums received on his behalf Section 171 states, However, an agent may retain or deduct from such sums received, advances made / expenses incurred by him in carrying out his duty, his commission and other remuneration account payable to him for acting as agent. . To communicate with the principal Section 167 states, In cuticles of difficulty, an agent must use all reason able diligence in communicating with and in seeking to obtain instructions from the principal. However, in emergencies, the agent may use his own discretion in adopting a course of action to safeguard the gratify of the principal. 6. Not to let his interest scrap with his duty Section 168 states, An agent must not depart the possibility of personal interest to conflict with the interests of his or her principal without disclosing that possibility to the principal.Upon full disclosure, it is up to the principal to decide whether or not to proceed with the particular transaction. If there is a breach of his duty, the principal may set aside the contract so affected and claim any profit which might sustain been made by the agent. Case Example In McPherson v Watt (1877), a solicitor used his brother as a nominee to purchase post which he was engaged to sell. It was held that, since the solicitor had allowed the conflict of interest to arise, the sale could be set aside. It was imm aterial that a fair price was offered for the property.The corollary to the above case is that the agent must not sell his or her own property to the principal without fully disclosing the fact. This pourboire into the next duty. 7. Not to make any obscure profit out of the performance of his duty In discharging the agents, an agent backsidet take any secret profit as corruption in the form of commission payments on a confidential basis, coffee money or kickback, tips and so on. If the agent take the secret profit, the profit must be submitted to the principal. In other words, the agent cant use the property of the principal to do something against the contract that agent for selfish motives.That means agents can pass water a profit, only the principal agents are prohibited from using the property for personal gain. Section 168 states, If the principal knows and agrees on a secret, the agent can save profit because the profit is not a secret anymore. It should be noted that the secret profit is the profit earned outside the knowledge of the principal. If the principal give consent, the agent can take the profit. In situations where the principal does not agree with a secret profit, the principal has the option as follows I. The agency contract may be terminated, if the contract is not to profit member.For example, A has ordered B to sell the estate belonging to A. B has reviewed the estate before sale, find some of the mines in the estate is not known to A. B tells A that he wanted to buy the estate for himself, but conceals the discovery of the mine. A, when knowing this, can either refuse to sell the estate or otherwise manage the sales out of choice. II. Principal may recover the secret profit from an agent For example, as happened in the case of Tan Kiong Hwa vs S. H Chong. Plaintiff has purchased a flat from a alliance in which the defendant was the managing director.Plaintiff has ordered the defendant as agent to sell the flat at RM45000 but the d efendant has successfully sold at RM54000. The difference in price of RM9000 has been credited to the company account. Soon the company is wound up. The court ruled the plaintiff entitled to recover from defendants for RM9000 has defaulted in carrying out his duties as an agent. III. Principal may refuse to pay a commission or other remuneration to the agent. Section 173 An agent was found guilty of misconduct in successful agency not entitled to receive any advice relating to the business he was one proceeds. In the case of Andrews vs Ramsay & Co. the principal was member instructions to agents to sell the property and agreed to pay a commission of ? 50. The agents hand to find the buyers and was given a ? 100 deposit. Agents thus have to pay around ? 50 to the principal and keep the rest of the ? 50 commission. In the transaction, the agents have to get ? 20 from buyers. The court ruled the principal near to demand a secret agent commissions earned from buyers. IV. Principal re serves the right to expel the agent for breach of duty. Principal reserves the right to expel the agent if the agent was using the property for profit secrets principal from agency business.Principal has such rights as the agent had failed to discharge its duties entrusted. If the principal has suffered loss as a result of the actions of the agent, he is entitled to claim damages. Principal reserves the right to expel the agent because duties. V. Principal may sue the agent and the leash party to recover damages corruption if it is a loss of the contract. What happens in the case Mahesan vs The Malaysian disposal Officers Cooperative Housing Society, the plaintiff was its director defendants. Defendant had purchased a piece of land worth $ 944,000 from a landlord who has obtained the land at $ 456,000 only.Plaintiff to know the fact but did not inform the defendant. As a result, the plaintiff has obtained $ 122,000 in bribes from land owners for the sale and purchase agreement. Th e court ruled that the defendant is entitled to claim the arrive of loss suffered by the crime. 8. A duty not to divulge confidential information To maintain confidentially about any matters communicated to him as agent, and not to disclose them to prospective third parties or anyone else. The relationship between principal and agent is a fiduciary relationship, depending upon mutual trust. Case Example In Robb v thou 1895 2 QB 315, an injunction was obtained against a former manager of a business to prevent him using for his own purpose a list of customers of the business which he had copied out while he was the manager. Faccenda Chicken Ltd v Fowler 1986 1 AER 617, the duty of good faith is broken if an employee makes or copies a list of his employers customers for use after his employment ends or deliberately memorises such a list even though, except in special circumstances, there is no general restriction on an ex-employee canvassing or doing business with customers of his fo rmer employer. . A duty to act personally An agent is not permitted to delegate to another person the tasks the agent has been appointed to perform. A principal has chosen an agent because of that persons expertise. The rule with respect to delegation can be relaxed by express agreement between the parties. If an agent delegates authority without permission, then the agent will not be entitled to be paid commission for any delegated acts. However, the rule has no drill in relation to minor clerical or administrative tasks.These tasks can be delegated. Case Example De Bussche v Alt (1878) 8 Ch D 286 ,agent was appointed by the principal to sell a ship in China at an agreed price but the agent was unable to effect such a sale and obtained the principals permission for the appointment by agent of a sub-agent to sell the ship in Japan. The Court held there was no breach of duty by agent in appointing a sub-agent as delegation was expressly agreed.