Relations of Principal and Agent

LAW OF AGENCY

Duties of Agent
To carryout the work undertaken according to

the directions given by the principal

In the absence of such directions he must act

according to the custom prevailing in that business

Duties of Agent
To carry out the work with reasonable care,

skill and diligence

Agent is bound to conduct the business with as

much skill as is generally possessed by persons engaged in similar business

Duties of Agent
To render proper accounts to his principal
Agent is bound to render proper accounts to his

principal

Duties of Agent
To communicate with the principal in case of

difficulty
To use all reasonable diligence in communicating

with his principal and in seeking to obtain his instructions

Duties of Agent
Not to deal on his own account
Agent must not deal on his own account in the

business without obtaining the consent of the principal

If agent deals on his own account the principal may

Repudiate the transaction

Claim from the agent any benefit which may have resulted to him in the transaction

Duties of Agent
To pay sums received for the principal
Agent is bound to pay to his principal all sums

received on his account

He may deduct all money due to himself

Duties of Agent
To protect and preserve the interest of the

principal in case of his death

Agent is bound to take, on behalf of the

representatives of his late principal, all reasonable steps for the protection and preservation of the interest entrusted to him

Duties of Agent
Not to make secret profit from agency
Agent must not make any profit beyond the

agreed commission or remuneration, except with

the knowledge and assent of the principal

Duties of Agent
Not to set up an adverse title
An agent must not set up his own title or the title

of a third person to the goods which he receives

from the principal as an agent

Duties of Agent
Not to put himself in a position where

interest and duty conflict

Agent is under a duty to act in the interest of the

principal
He should not put himself in a position where his

duty to the principal and his personal interest conflict

Duties of Agent
Not to delegate authority
Agent must not as a general rule, depute another

person to do what he has himself undertaken to

do

Rights of Agent
Right of retainer
The agent may retain, out of any sums received on

account of principal, all money due to himself in

respect of his remuneration and advances made or expenses incurred by him in conducting such business

Rights of Agent
Right to receive remuneration
The agent is entitled to his agreed remuneration,

or if there is no agreement to a reasonable

remuneration
If the transaction for which agent claims

remuneration is the direct or indirect result of his services or efforts he is entitled to remuneration

Rights of Agent
Right of lien
An agent is entitled to retain goods, papers and

other property, whether movable or immovable,

of the principal received by him until the amount due to him is paid.

Rights of Agent
Right of indemnification
Agent has a right to be indemnified against the

consequences of all lawful acts done by him

This right does not extend to acts which are

known to the agent to be unlawful

Rights of Agent
Right of compensation
Agent has a right to be compensated for injuries

sustained by him by neglect or want of skill on the

part of the principal

Rights of Agent
Right of stoppage in transit

This right is available in two cases

Where he has bought goods for his principal, by

incurring the personal liability Where he is personally liable to the principal for the price of the goods sold

Duties of Principal
To indemnify the agent as against the

consequences of all lawful acts

Indemnify the agent as against the consequences

of all lawful acts done by agent

Duties of Principal
To indemnify the agent against the consequences of

acts done in good faith

When agent does the act in good faith the principal is liable

to indemnify the agent against the consequences of that act

However for criminal acts the principal is not liable

Duties of Principal
To indemnify agent for injury caused by

principals neglect
The principal must compensate to his agent in

respect of injury caused to such agent by neglect or want of skill

Duties of Principal
To pay the agent commission or other

remuneration agreed

Rights of Principal
To recover damages
If Principal has suffered any loss because of the

disregard of any direction of the principal by

agent, he can recover damages accruing as a result from the agent

Rights of Principal
To obtain an account of secret profits and

recover them and resist a claim for

remuneration
If agent makes any secret profits the principal has

the right to recover them from the agent

Rights of Principal
To resist agents claim for indemnity against

liability incurred
Principal can show that the agent has acted as

principal himself and do not merely as an agent, he can resist the claim for indemnity