According to Karim and Zali case that stated above, we can conclude that Zali was Karim’s Agent.

The
main issue that occurred between them is that Zali failed to fulfill his rights and duties as an agent.
In the case, it says that Zali sold all the damaged medical supplies below the market price. In section
167 of the contracts act 1950, an agent must communicate with his principal by using all reasonable
diligence to obtain his instruction. However In this case, Zali made his decision on his own without
the knowledge of the principle. He did not ask for the permission of Karim to sold all the goods in
the pharmacy. Instead, he must use his diligence to communicate with Karim before making any
decisions. Following with that, Zali also sold all the medical supplies that were not damaged at a low
price as it is easier for him to clean the premises. The action made by Zali was completely wrong as
he is not following his duties of the agent and principal to use skill and diligence in performing duties
stated in section 165 contract acts. Zali should have think for the benefits of his principal instead of
his own benefit. For example in the case between Keppel v Wheeler, the agent failed to use skill and
diligence as he did not communicate to his agent about the second offer which was higher than the
first offer. Hence the court held that the agent must pay the difference between the first and second
offer. To add on, he even sold the furniture in the pharmacy and the infrared digital thermometer
with a stand though it was still functioning. This situation has made it clear that Zali was not obey to
Karim’s instruction and he need to pay compensation for the loss of Karim’s pharmacy. In conclusion,
Karim has the rights to claim for damages and terminate Zali as his Agent as he is not doing his rights
and duties of the agent to the principal.