The Duties of an Agent to Principal

2088 Words Dec 11th, 2012 9 Pages
The duties of an agent depend primarily on the contract of agency if there is one. Subject to any such express terms, the agent owes a number of implied duties or obligations to his principal. It is the agency relationship as such that gives rise to these obligations so that, as a general rule, they fall as much on the gratuitous agent as on the paid agent.
1. Obey the Principal’s instructions Section 164 states,
The agent must obey the instructions given to him by his principal even if he thinks the instructions are wrong. Sometimes of course the principal may expect the agent to advise him and indeed he may be employing an agent to use skill and care. The agent must not delegate his duty to another
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The Court of Appeal held that the principal could not recover it from agent on the general principal that money paid under an illegal contract is irrecoverable.

4. To pay his principal alls sums received on his behalf Section 171 states,
However, an agent may retain or deduct from such sums received, advances made / expenses incurred by him in carrying out his duty, his commission and other remuneration payable to him for acting as agent. 5. To communicate with the principal
Section 167 states,
In cases of difficulty, an agent must use all reasonable diligence in communicating with and in seeking to obtain instructions from the principal. However, in emergencies, the agent may use his own discretion in adopting a course of action to safeguard the interest of the principal.

6. Not to let his interest conflict with his duty
Section 168 states,
An agent must not allow the possibility of personal interest to conflict with the interests of his or her principal without disclosing that possibility to the principal. Upon full disclosure, it is up to the principal to decide whether or not to proceed with the particular transaction. If there is a breach of his duty, the principal may set aside the contract so affected and claim any profit which might have been made by the agent.
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