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Rights/duties btw principal and agent (Commission (usually payable only if…
Rights/duties btw principal and agent
Remuneration
the agent has the right to be paid the agreed amount (a right of remuneration from the principal)
the amount can be expressly agreed or implied, provided that it was clearly the intention of both parties that the agent be paid
if the amount of remuneration is not expressed, then the agent is entitled to a "reasonable" amount
Commission
usually payable only if the agent has performed precisely and completely the obligations in the agency agreement
no sale = no commission
if the sale is not brought about by the actions of the agent, no commission payable. If the sale would have occurred without the agent's intervention the principal is within their rights to refuse to pay the commission
if the principal interferes with the agent's actions in a way that makes the agent's task more difficult, there is a right of action against the principal by the agent
if an agent achieves the purpose of the agency agreement, but the transaction is rendered void or illegal by statute, they cannot claim any commission
an agent who is in breach of their duties towards the principal would normally not be able to claim commission. (except when breach is technical and acted honestly)
Indemnity
right to be indemnified by the principal for any loss incurred during the course of carrying out the authorised duties on behalf of the principal.
there is no right of indemnity if the agent acts in breach of duty or illegally, or carried out a transaction rendered void by statute.
Hichens, Harrison, Woolston & Co v Jackson and Sons
Lien
the right of lien (right to retain) goods in their possession, belonging to the principal if they have not received payment from the principal
Mandate
a right to receive a clear and precise mandate, setting out the limits of their authority to act on behalf of the principal.
where an agent is a commercial agent - the right to request and receive a signed, written contract detailing the terms of the agency
Duty to exercise reasonable care
exercise reasonable care when carrying out duties on the principal's behalf
more skill is expected from a professional person than a layman
if payment is made, this will be taken into account to assess the care and skill expected; even unpaid agent might be liable in the tort of negligence if he gives bad advice. If they are unpaid, they must exercise the same standard as if acting for themselves
Chaudhry v Prabhakar
Duty to provide information to the principal
the duty continues even after the relationship has been terminated for contracts or negotiations entered into prior to that termination
Yasuda Fire and Marine Insurance Co v Orion Marine Insurance Underwriting Agency Ltd
Duty not to take a secret profit or bribe
the issue is not whether the agent has caused a loss to his principal, but whether he has made a profit out of his position
IDC v Cooley
a bribe need not carry any unlawful intent, but includes payments to the agent without the knowledge of the principal
once the principal is aware of the secret profit or bribe, they can:
dismiss the agent without notice
claim the secret profit or bribe themselves;
refuse to pay the agent the commission due, or reclaim it if already paid;
refuse to be bound by the contract
sue the agent or 3rd party for damages incurred
Duty not to delegate their authority
EXCEPTIONS
the principal expressly authorises the delegation
the agent can imply a power to delegate from the circumstances
the delegation is of an act requiring no care and skill
the delegation became necessary due to unforeseen circumstances
Duty to avoid a conflict of interests
must disclose personal interest in the transaction, enabling the principal to decide whether to continue or not
the principal has the right to revoke the agency, claiming any profit due to the agent and refusing to pay any commisison
Duty of confidentiality
Duty to carry out wishes of the principal in accordance with the agency agreement
even if the agent thinks he is helping the principal by not doing so
Duty to keep accounts
accounts for all money and property received on behalf of the principal
keep proper accounts
keep their property separate from that of the principal
REMEDIES
the right to dismiss the agent without notice
the right to refuse to pay commission
the right to recover any secret profit
the right to rescind the contract which the agent made with the 3rd party