Duties That a Principal Owes to an Agent
Question 3 (A) April 2005
Identify and elaborate upon the duties that a principal owes to an agent.
Answer: An agency is the creation of a contract entered into by mutual consent between a principal and an agent. By agency, a principal grants authority to an agent to act on behalf of and under the control of the principal. A principal owes certain contractual duties to his/her agent by an agent will serve the principal loyally and with obedient. The principal duties can be found in section 172 of Contracts Act 1950. The acts said that to pay the agent’s commission or other remuneration as agreed between the agent and the principal. Principal main duty is to pay his agent the commission or other remuneration as they have agreed unless the nature of their relationship is gratuitous one. If there are no amounts being agreed, the agent is entitled to reasonable amount based on quantum meruit or based on how much the works have been done by the agent. For instance, cases of Tan Chiok Sing v Llian Fatt’s Sawmill Co. the case stated principal still has to pay the agent even of the contract between the principal and the third party had failed. This is because the agent had fulfilled his duties to the principal. However, there are exceptions on this section. Section 172 of Contracts Act 1950 states agent will be liable and entitled to the commission when he / she had fully fulfill the duties that been given by the principal. Not only that, section 173 of Contracts Act 1950 states also the agent not only entitled to the commission if he is found guilty in misconduct, for example, doing a fraud or have or received a secret profits from the last duties, for example, in the case of Andrew v Ramsay. Next, the principal must not prevent or hinder the agent from earning his commission. Principal cannot do any act which would prevent his / her agent from earning his / her commission. Example of this statement, if principal appointed
Identify and elaborate upon the duties that a principal owes to an agent.
Answer: An agency is the creation of a contract entered into by mutual consent between a principal and an agent. By agency, a principal grants authority to an agent to act on behalf of and under the control of the principal. A principal owes certain contractual duties to his/her agent by an agent will serve the principal loyally and with obedient. The principal duties can be found in section 172 of Contracts Act 1950. The acts said that to pay the agent’s commission or other remuneration as agreed between the agent and the principal. Principal main duty is to pay his agent the commission or other remuneration as they have agreed unless the nature of their relationship is gratuitous one. If there are no amounts being agreed, the agent is entitled to reasonable amount based on quantum meruit or based on how much the works have been done by the agent. For instance, cases of Tan Chiok Sing v Llian Fatt’s Sawmill Co. the case stated principal still has to pay the agent even of the contract between the principal and the third party had failed. This is because the agent had fulfilled his duties to the principal. However, there are exceptions on this section. Section 172 of Contracts Act 1950 states agent will be liable and entitled to the commission when he / she had fully fulfill the duties that been given by the principal. Not only that, section 173 of Contracts Act 1950 states also the agent not only entitled to the commission if he is found guilty in misconduct, for example, doing a fraud or have or received a secret profits from the last duties, for example, in the case of Andrew v Ramsay. Next, the principal must not prevent or hinder the agent from earning his commission. Principal cannot do any act which would prevent his / her agent from earning his / her commission. Example of this statement, if principal appointed