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CHAPTER 9: LAW OF AGENCY - Coggle Diagram
CHAPTER 9: LAW OF AGENCY
The principal's duty towards an agent
To pay the agent the remuneration/commission when the act
is completed, unless the agency relationship is gratuitous.
The principal will not intentionally block or prevent the agent
from earning his commission.
To relinquish the liability of the agent for the actions taken
while carrying out his duties.
An agent's duties to the principal
Carry out the principal’s instructions.
Exercise proper care,skill and diligence.
Render proper accounts.
Communicate with the principal.
Avoid conflict of interest.
Give sums received on behalf of the principal back to the principal.
Cannot make secret profit.
Cannot disclose confidential information.
Not to delegate power to another.
Authority of an agent
Actual authority
Exprexx actual authority
Implied actual authority
Apparent/ostensible authority
When a principal, through the words used and his acts let the other
party believes that the agent has the power to do so.
When an agent’s authority has been terminated by the principal, but the
third party have not been notified.
Effect of the contracts made by agents
If the agent acts on behalf of the principal and named the
principal.
If the agent states that he is acting on behalf of the principal, but
does not name the principal.
If the agent had contracted on behalf of the principal
without informing the existence of the principal.
Termination of agency
By the act of the parties involved
a) By mutual consent of the principal and the agent.
b. Termination of the agent’s authority by the principal.
c) Rejection of power by the agent.
By operations of laws
a. Completion of agency
b. The principal or the agent died or become unsound mind
c. The principal is declared as bankrupt
d. Time period fixed has expired
e. Event which makes agency unlawful