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14 Jan

COMMERCIAL TRANSACTIONS 1.3 AGENCY-DUTIES AND RIGHTS

DUTIES OF THE AGENT.

  1. The agent has a duty to perform: Lawful obligations under the agency. Generally, a gratuitous agent is not liable for non-performance even if he has promised to perform except he voluntarily assumes his duties. Coggs V. Bernard. The gratuitous agent undertook to transport several barrels of brandy belonging to the principal. While offloading, a barrel was staved and 150 gallons of brandy were lost. The plaintiff sued the gratuitous agent for negligence. It was held that the gratuitous agent was in breach of his duty for not taking care. Note however (as was held in Cohen V. Kittel)-an agent cannot be sued for not performing an illegal act.

In necessity situations, he should act in the interest of the principal- pragger V. Blastpiel.

  1. Duty of obedience: Obey lawful instructions of the principal. The general principles of interpretation would apply in knowing whether the principal has instructed or not. In the absence of clear instructions, he should exercise his discretion judiciously and in the interest of his principal- Prager V. blastpiel, Sacks V. Milkos, GNR V. Swaffield.

Nigeria Craft Bags Ltd V. Express Clearing and Shipping Nigeria Ltd. A professional agent for example, a legal practitioner would not be expected to contravene his rules of professional conduct notwithstanding the instruction of the principal.

  1. The duty of care and skill: Generally, a paid or gratuitous agent owes a duty of care and skill to the principal. However, views are divergent as to whether the paid agent owes a higher degree of skill and care. A host of cases are in contrast with each other as such it is submitted that this argument be disposed and an equal degree of care be owed. See Coggs V. Bernard. Where it was held that a gratuitous agent was in breach of his duty by not exercising due care.

The agent should meet up (reasonably) to the calling he professes. Omotayo V. Ojikutu 1961 1 allnlr at oage 901.

  1. Delegatus non potest delegare: An agent owes a duty to act personally and not to delegate his powers. Unless such is authorized by the principal-Debusshe V. Alt, if he delegates, the principal is not bound by the act of the sub agent. John Holt and co ltd. V. Jafoaru 1958 nrlr at page 29. Exceptions: in necessary situations or where delegation is permitted by custom or usage in the particular case. Finally, where a part of the function requires ministerial or administrative acts, then delegation is permitted. For example, delivery of letter. Even where permitted, in the event of a breach, the principal should sue the agent rather than the sub-agent.
  2. The fiduciary duty: as there is a fiduciary relationship the agent is expected to act in good faith on behalf of the principal. To avoid a breach of duty where the agent suspects that his interest is about to conflict, he is advised to first seek the permission of the principal. There are some sub principles of this;
  • Account for secret profit made– (he has to refund the secret profit but he can claim for his remuneration) Palmer of Nigeria ltd Fonseca 1986 18nlr page 49.
  • The agent must not accept bribe. (the agent would have to return the bribe and he cannot also sue for his commission because it is criminal and he collected the bribe to perform an action to the detriment of the principal)
  • Must not put himself in a position where his personal interest conflicts with that of the principal. In essence, the agent must not take advantage of the principal in any transaction. For example, an agent employed to sell cannot sell to himself. Note the issue of corporate personality.- Macpherson Hall.

De Bussche V. Alt;

In this case, a was employed by b to sell a ship for 90000. B contracted with c in japan to sell it. C bought it. C then sold it to a Japanese prince for 160000. It was held that since a has approved c as a sub-agent, c has breached his trust by changing his position from that of a sub-agent to a purchaser as such was to account for profits to a.

  • An agent must not compete with his principal in the same business. Igben Etawari.
  • Duty to keep and render account whenever demanded by the principal. Thus he should keep proper account of property and money received on behalf of the principal. He should have a separate account for the principal’s money and must not comingle the funds. Nigeria craft bags ltd
  • The agent must keep the principal’s money separate from his own.

RIGHTS OF AN AGENT AGAINST HIS PRINCIPAL

:: RIGHT OF LIEN: He may retain the principal’s goods in his possession where the principal fails to pay his due remuneration or claims legitimately due. E.g. if Ola tells Justin (a tech guru) to look for a good I-phone 6 below 80k for him. Justin gets a good iphone 6 but Ola refuses to pay or pays half and promises to pay the balance later. Justin has the right to hold the Iphone 6 and refuse to give Ola. Until he has paid the full price. If Ola does not pay within a reasonable time, Justin can sell the Iphone 6 to another person to defray his expenses.

:: RIGHT TO REMUNERATION: A gratuitous agent is not entitled to remuneration where none is provided. He who asserts remuneration must prove- Afolabi V. Polymera Industries Ltd

If the agreement requires full performance, where the performance is in part, the agent has no remuneration-McCullum V. Hicks it was held that the plaintiff’s claim must fail because he failed to find a purchaser to go through with the complete transaction. For estate agents, there must be an express contract of what remuneration would be. The money must have come about as a result of the agent’s act because it is from the profit that he is paid-Luxor Ltd V. Cooper. Except the contrary is stated in the agreement.

Where the contract requires the agent to introduce a purchaser, the purchaser introduced must be willing and able to purchase, and the agent should only be paid if the sale is effected due to his own effort and party brought-Omoregie V. Attorney General.

RIGHT TO BE INDEMNIFIED.

In respect of liabilities legitimately incurred during the execution of his duties. See Swaffield V. GNR.

THE PRINCIPAL AND THIRD PARTIES

The major determinant is whether the principal is disclosed or not. Only a disclosed principal can be sued by a third party. Except there is a term in the contract to the contrary. Or a contract of deed was entered into by the agent in his own name.

Where a principal is undisclosed, and the third party does not even know that he exists at the time of contracting, then the third party is entitled to sue the agent. The agent may then co-join the principal to the suit or claim indemnity form the principal.

The admiralty jurisdiction act allows a third party (in admiralty matters) to sue the agent even where the principal is disclosed.

In tort, the principal can be liable for tort committed by the agent in the execution of his duty within his scope of authority.- saka V. owoade.

In an agency coupled with interest, the principal is not expected to deal with anyone else.

 

Isochukwu

Quite eccentric really

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