LAW OF AGENCY
RIGHTS AND DUTIES OF AN AGENT
DUTIES OF AN AGENT
The relationship between the principal and the agent, no matter how the relationship arose, is essentially one of trust (a fiduciary relationship).
1. The agent must obey the instructions given to him by his principle even if he thinks the instructions are wrong. Sometimes of course the principal may expect the agent to advise
2. him and indeed this may be the reason he is employing an agent, that is to say, to use his skills and care. The agent must not delegate his duty to another person unless such delegation had been agreed with the principal, is the custom of the trade or the delegation merely takes place in relation to purely administrative matters.
3. An agent must not allow his personal interests to come into conflict with those of the principal.
4. The agent must not make a secret profile or take a bribe from a third party.
5. If the agent accepts a secret commission or a bribe the following consequences are ensue:
i. The principal may dismiss him
ii. He can recover the secret commission from the agent. If the commission has not been paid over to the agent, the principal may recover it from the person who promised the agent.
iii. Whether he has recovered the secret commission or not, the principal may still bring an action for damages against the person who gave the agent the bribe.
iv. He may refuse to pay the agent any commission or remuneration. If he has already paid it, he may recover it from the agent.
v. The principal may repudiate the whole contract entered into by the agent whether the offer of a bribe did influence the agent’s course of action or not.
6. The agent must not disclose any confidential information he has obtained through acting as agent. He must inform the principal of all matters relating to the agency when they come to his notice.
7. There must be no delegation. this is because the relationship between a principal and agent is a personal one. Where the agent’s authority is couples with a discretion (for example, to inspect a picture, and if it is genuine, to buy it), delegation of such authority will be a breach of the confidence reposed in the agent. Delegation is permissible in the following cases:
? Where delegation was in the contemplation of the parties at the commencement of the agency.
? Where the appointment of a sub-agent is necessary for the proper execution of his work.
? If delegation becomes necessary as a result of a sudden emergency.
? Where delegation is sanctioned by trade, custom or usage.
? Where the work for the exercise of any discretion by the sub-agent.
? Where part of the work requires special skill (for example a solicitor to draft a conveyance of a house) and the agent does not have that skill.
RIGHTS OF THE AGENT
1. Right of re-imbursement. Any reasonable expenses necessarily incurred by the agent in performing his duties must be repaid to him by his principal. This obligation may be enforced even where no amount has been fixed, by a quantum meruit.
2. Set-off. If the principal brings an action against the agent for breach of duty, the agent may exercise his right of set-off any sums due to him either as commission or as indemnity for expenses incurred.
3. Lien (the right to take another’s property if an obligation is not discharged)
If the principal has failed to pay the agreed commission or an indemnity to the agent and the agent has any goods of the principal in his possession, then, subject to certain conditions, the agent may exercise a lien on such goods and retain possession until the principal has honoured his obligation.
4. Action for the agreed commission or remuneration. The agent is entitled to his commission after he as performed his agency.