BBA 102

RIGHT AND DUTIES OF AGENT

INTRODUCTION
Agency is the relationship which subsists
between the principal and agent,
where the agent has been authorized to act
for the principal or
represent him in dealing with others/ 3rd
party

CONT..
S.135 CAAGENT IS A PERSON EMPLOYED TO DO ANY A
CT FOR ANOTHER IN DEALING WITH THIRD PE
RSON
S.135 CAPRINCIPAL IS THE PERSON TO WHOM SUCH A
CT IS DONE OR WHO IS SO REPRESENTED.

1. To obey the principals intruction

To obey the principals instructions section 164

An agent must obey the principals instructions.

If failed to obey; breach of contract of agency and the a

gent is liable for any loss sustained by the Principal. Ho
wever, not to follow instructions that against the law.

Turpin v Bilton (1843)5 Man & G 455. The agent has be

en instructed by the Principal to get the insurance for hi
s vessel. However, the agent failed to do so. The vessel
lost and as a result the Principal bare some loss.

Held: the agent is LIABLE for breach of duty due to his f

ailure to obey the Principals instructions. Thus the agen
t LIABLE to pay compensation.

2. To work with reasonable skill and dili

gence

To exercise care and diligence in carrying out his work and to use s
uch skill as he possesses.

section 165. an agent is bound to conduct business of the agency

with as much skill as is generally possessed by person engaged in
similar business

i.e. : if the agent is employed for professional service, he must use

all his skills & expertise that usually required for a same profession
al man.

Keppel v Wheeler [1927]1 KB 577

the D (agent) was employed by the P (Principal) to sell his house.

The first offer was accepted by the P with a condition. A few days la
ter a higher offer (2nd offer) was made by X but this does not com
municated to P.

the court held that the D liable to pay the differences between 1st
offer and 2nd offer

3. To render proper accounts when requ

ired
Harry Parker Ltd v Mason [1940] 2 KB 590
- where the principal conspired with agent to make shame
bets on the course and bets with street bookmakers contr
ary to the existing law
- 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 reco
ver it from agent on the general principal that money paid
under an illegal contract is irrevocable

4.To communicate with the principal in difficult situations.

Base on the SEC 167,when the agent meet some difficulty,he m
ust try his best to communicate with the principal. When the ag
ent can not communicate with principal, he must to make effort
to ensure that principal is able to get the maximum benefit, and
reduce losses. It is the duty of the agent .And he need to share h
is ideas and views with the principal to help him.

5.Not to deal on his own account.

case:De Mattos v. Benjamin(1894) 63 LJQB 248
It was held that if a turf commission agent is employed to make bets
he must pay over any winnings received by him as a result of such bets.
Because based on the SEC 165,as a turf commission agent,he must
give all the money to the principal which the agent use of his principal.H
e can't let the money become his own wealth.Because this is the agent's r
esponsibility of the law mentioned.

6.DUTY OF AN AGENT NOT TO EARN OR MAKE SECRET PR

OFIT. ( SEC168)

case:Regier vs. Campbell Stuart case (1939 Ch. 766) .

M was employed as an agent by N to purchase a house for him.
First, M purchased a house for 2000 in the name of nominee and then
entered into contract with the nomtnee to purchase the same for 4500.
He sold the same house for 5000. Thus, it is obvious that M wanted
to earn secret profit. it was held that M was liable to account to N all t
he proft he earned in the transaction.
So in this case,the agent earned secret profit.But base on the law of SE
C 168,he can't do that.So his principal can do many things for him,like:
a)Recover the amount of secret profit earned from the agent.
b)Repudiate the contract if it is disadvantageous to him.

7. To pay to his principal all sums receiv

ed on his behalf

Section 170

Kribbs v. Jackson, 1957 Pennsylvania Supreme Court

the defendant had acted as an agent of the plaintiff for t

he purpose of collecting rent on property that the plaintif
f owned. The trial court found that the defendant had fra
udulently concealed the full amount of rent collected an
d had thereby earned a profit in excess of his commissi
on. The court ordered the defendant to account for the f
raudulently-earned profit. The Supreme Court affirmed t
he trial court, reasoning that all profits made and the a
dvantage gained by the agent in the execution of the ag
ency belong to the principal.

8. Not to delegate his authority

October 31, 1995, shareholders A commission agent of a securities

company to buy 500 shares of stock, price 15.40 yuan per share, e
ffective for the period October 31, 1995, the same day, the agent pr
ice of 15.45 yuan per share A buy 500 shares of stock, when A inte
nds to withdraw the commission, the agent told him, revocation del
egate void. A discovery when the agent exceeds 0.05 yuan to buy
shares, now has refused to recognize the above stock owned by al
l, and requested the return of the price of 7725 yuan of securities c
ompanies.

Securities companies accepted by customers. It should be in the cl

ient mandate, accurate and timely execute buy and sell orders to t
he commission, only this, the consequences of buying and selling
securities company securities to be borne by the customer. No age
ncy securities companies, beyond the conduct after the termination
of agency or agency, in this case the securities company staff beyo
nd the authorized scope of customers buy the stock, its consequen
ces can only be within securities firms themselves, and should com
pensate the economic losses suffered by customers.

DUTY OF PRINCIPAL TO AGENT

The duties of principal to agent is provided under sectio
n 175 178
Section 175 agent to be indemnified against consequ
ences of lawful acts
Section 176 - agent to be indemnified against conseque
nces of acts done in good faith
Section 177 non liability of employer of agent to do cri
minal act
Section 178 compensation to agent for injury caused
by principals negligent.

Duties of Principal Towards A

gent
To pay Commission / other agreed Remuneration

Not to willfully prevent or Hinder the agent from

Earning Commission

To indemnify/ reimburse the agent for lawful acts

done in the exercise of his duty

1. To pay Commission / other agr

eed Remuneration

upon the completion of all contractual duties of th

e agent.
S.172 of CA

payment for the performance of any act due

to agent until the completion of the act.

1. To pay Commission / other agr

eed Remuneration

Depends on the terms of the contract.

If no amount- reasonable remuneration will be pa

id.

If agency guilty of misconduct, he losses his right

S. 173

..agent guilty of misconduct, not entitled to an

y remuneration.

Andrews v Ramsay & Co. [1930]

2 KB 635

Held:

The P IS NOT BOUND to pay the a

gents commission due to the fact
that the agent had received secret
profit or a bribe when performing
his duties as an agent.

2. Not to willfully prevent or Hind

er the agent from Earning Commi
ssion

Under the duty of P not to prevent the agent fro

m gaining his commission.

Examples whereby the P is said to willfully PRE

VENTING or Hinder the agent from Earning Co
mmission

1) the P refused to accept the contract made by t

he A
2) the P appointed another agent to carry on the
same duty or to deprive the original agent from
earning commission.

3. To indemnify/ reimburse the agent for lawful acts

done in the exercise of his duty

i) Where the agent incurs some liabilities or l

osses in performing his duties.
Hichen, Harrison , Woolston & Co v Jack
son & Sons

Held:

The agent is entitled to damages for anythi

ng incurred in the performance of his dutie
s and to be reimbursed for whatever the ag

Kyall & Evat v Lim Kim Keat (1928) S

SLR 206

The P had instructed the agent who were share

broker to sell on her behalf the shares in a com
pany registered in England which is according t
o the will of the deceased. The broker then mad
e a contract to sell the shares to 3rd party.

Unfortunately, it was discovered that the will

had not been proved in England and the shar
es cannot be delivered. The agent was comp
elled to buy other shares for substitution an
d consequently suffered loss. The agent sue
d the P to recover hiss loss.

Held:

fail to disclose the fact that the shares c

annot be delivered will render the P to i
ndemnified the loss of the A.

ii) the A causes injury to 3rd party

S 176

where one person employs another to

do an act, the said agent does the act in
good faith, the employer is LIABLE to in
demnify the agent against the conseque
nces of the act though it cause an injur
y to the rights of the 3rd person.

iii) the A suffers injury during the cours

e of his duties due to P.

S. 178

the P must make compensation to

his agent in respect of injury cause
d to the agent by the Ps neglect or
want of skill.

However, if the agent is employed by the P

to do a criminal act, the P IS NOT LIABLE
to indemnify the A any commission for any
consequences of the said act, even though
there was an express or implied promise of
the P for such indemnify.

S. 177

where one person employs another to d

o an act which is criminal, the employer
IS NOT LIABLE to the agent.

THE END