DUTIES OF AGENT TO PRINCIPAL

• duties of agent to principal

  i. to obey the principal's instructions (section 164)

  • An agent must follow the instructions of the principal. If an agent does not follow, it is a breach of agency contract.
  • An agent has to follow the instructions if it is lawful.

  (case)

  Bostock v jardine

  The agent was held liable when he bought more than he was directed to buy. However, an agent is under no duty to obey if the principal’s instructions are unlawful.
• duties of agent to principal

  ii. To exercise care, skill and diligence (section 165)

  • Agent must use his skill and diligence about the interest of his principal, and he needs to be careful when acting the principal's behalf

  (case)

  Keppel v Wheeler

  An agent was asked to sell a house. He got an offer from A, which the owner accepted conditionally. Later, B made a higher offer, but the agent didn't tell the owner. The owner sold to A. The court held the agent was wrong for not informing the owner about the better offer and had to pay the owner the amount difference between the two offers.
• duties of agent to principal

  iii. to communicate with the principal (section 167)

  • The agent must keep informing the principal about matters that are relevant to the agency.
  • This involves providing timely and accurate information about the agent's activities
• duties of agent of principal

  iv. not let the agent's own interest to conflict with his duty

  • The agent must always prioritize the principal's interests over their own.
  • The agent can't represent both parties in a deal unless everyone agrees.
  • No secret profits. All money and profits from the agency work belong to the principal.
• case related to (agent must not let his own interest to conflict with his duty)

  Wong mun wai v wong tham fatt

  An agent sold the principal's land to the agent's own wife at a price below market value. The court held this was wrong because the agent sold the land too cheaply and he sold to his own wife without telling the principal, which is a conflict of interest.
• duties of agent to principal

  v. Not to make any secret profit out of the performance of the agent's duty

  • secret profit = bribe or any financial advantage the agent receive on top of commission that has been agreed

  
  

  (case)

  Tam Kong Hwa v Andrew S.H Chong

  Plaintiff bought a flat from Defendant's company. He asked Defendant to sell the flat for RM45,000. Defendant sold it for RM54,000 but kept the extra RM9,000. The court held that the plaintiff has the right to recover the rm9000 because the defendant has breached his duty as an agent
• actions that can be taken by the principal if there is a secret profit

  i. If the principal knows about it, and consent to it, the agent can keep the profit. (Section 168)
• actions that can be taken by the principal if there is a secret profit


  ii. If the principal does not like it, the principal may reject the contract that has been entered by the agent on his behalf. (Section 168)
• action that can be taken by the principal if there is a secret profit

  iii. Principal may recover the bribe from the agent (Section 169)

  • the principal can claim any benefit that the agent got from the losses he got
• actions that can be taken by the principal if there is a secret profit

  iv. The principal may refuse to pay commission or remuneration to the agent (Section 173)
• actions that can be taken by the principal if there is a secret profit

  v. The principal may dismiss the agent on the ground of breach of duty

  vi. Principal may sue the agent and third party for damages. This is for any loss he suffered due to entering the contract.