7 : DUTIES & AUTHORITY

OF PRINCIPAL
GROUP MEMBER :
1. NUUR IZWANDIE BIN MOKTA SX132730HADF04
2. MOHAMAD NASUHA BIN PUASA SX132722HADF04
3. MUHAMMAD FARHAN BIN SHAM SX132709HADF04
4. KAMARIAH BINTI OMAR SX132691HADF01
5. SITI FADILAH BINTI MUHIDI SX132700HADF01
6. AZMALIZA BINTI IBRAHIM SX122712HADF01
 CONTRACT OF AGENCY
A person employs another person to do any act for him or to represent him in
dealing with third persons so as to bind himself by the acts of such another
person.

The Law of agency is based on the following general rules :

1. Whatever principal can do by himself , he may get the same done through an
agent except the act involved is of personal nature . E.g. Marriage

2. What person does by himself . Thus ,the acts of the agent are the acts of the
principal.
 PRINCIPAL
The person for whom act is done by an agent or who is represented in dealings with third persons by
an agent is called as principal.

WHO CAN BE PRINCIPAL ?

Any person who is of the age of majority according to the law of majority and who is of sound mind
may employ an agent .

It has been held that a guardian of a minor can appoint him as agent.
DUTIES OF THE PRINCIPAL TO AN AGENT
There are certain duties that the principal owes to his agent. While these duties
are not as concrete nor so distinctly spelled out by state statutes, the duties are
important in determining the rights of the agent when the principal fails to live up
to obligations created by the agency relationship.

The duties and responsibilities of a principal to his agent are governed under
Sections 175 to 178, Contract Act 1950.

The duties and responsibilities are as follows :

1. To pay the agent commission or other agreed remuneration unless the agency relationship is
gratuitous- Dolphin v Harrison, San Miguel Pte. Ltd.The principal is only obliged to pay the agent if the
agent complied with the terms of the agency agreement and when the agent has earned the payment.
However the agents right to commission is not affected by the fact the transaction has not been
beneficial to the principal or the fact that the transaction or contract has subsequently fallen through no
fault of the agent.

2. Not to willfully prevent or hinder the agent from earning his commission.The agents right to
commission is not affected even if the transaction has not been beneficial to the principal or if the
transaction or contract has subsequently fallen through no fault of the agent.
3.To indemnify the agent any loses the agent suffers because of the principal. However, the agent
loses his right to be indemnified if the acts beyond his duty or if he has performed his duty
negligently.

4.To reimburse the agent for all expenses if they were authorized by the principal and it is within
the scope of the agency as well as acts done in the exercise of his duties.The agent only has a
right to be reimbursed for authorized transaction within the express, implied or usual authority
of the agent and this right is not available where the loss is due to the agent own negligence,
default or insolvency. Reimbursement entitles agent to recover his commission or remuneration
as well as money which he paid on the principals behalf.
5.To cooperate with and assist the agent in the performance of the agents duties and the
accomplishment of the agency

6.To compensate the agent an amount either upon the completion of the agency or at some
other mutually agreeable time.
7.To respect any lien the agent has over the property of the principal in the actual or
constructive possession of the agent.The lien, is in the hands of the agent, a passive right of
detention of the property of the principal. Where an agent has an outstanding claim against a
principal for remuneration or an indemnity, the agent can enforce that claim by exercising a lien
any property or money of the principal is which is lawfully in the agent possession.
 SEKIAN
TERIMA KASIH