Law of Agency

LAW OF AGENCY
DUTIES OF AN AGENT TOWARDS THE PRINCIPAL
1) DUTIES OF PERFORMANCE
a) Contractual Agent’s Duty to Perform
An Agent who is appointed by a Contract is bound to act in accordance with its

terms and not to exceed his authority.
Bertram Armstrong v. Godfrey (1830) 1 Knapp 381

A was entrusted by P to sell shares when the amount reached Sh. 85 or more. He
waited without selling.
Held – he was bound to sell when the amount reached Sh. 85 and had no discretion
to wait.
Ferrers v. Robbins (1835) 2 CM & R 152

An auctioneer was authorized to sell for ready money only. He sold the furniture
and took a bill of exchange. The buyer defaulted on the bill of exchange.
Held – the auctioneer was liable for the proceeds of sale on the default.
Overend, Gurney & Co v. Gibb & Gibb (1872) LR 5 HL 480

A company was formed to purchase goodwill and assets of a firm. The firm was in
debt. Shortly after purchase, the whole business failed. The company sued a director
for negligence for buying when he knew the firm was in difficulty.
Held – the director was not liable for doing the act he was expressly authorized
(although the instruction was inherently imprudent)
b) The Agent’s Duty to obey Instructions
The Agent is bound to obey all lawful and reasonable instructions of the Principal,
in relation to the manner in which the Agent carries out its duties.
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Lecture Notes of Mr. Chanaka de Silva - 2019
Sri Lanka Law College
- What is reasonable will depend on all circumstances, including customs.
c) The Agent should carry out his instructions with reasonable dispatch.
- If an Agent cannot carry out instructions so, he must inform the Principal.
Barber v. Taylor (1839) 5 M & W 527

P instructed A to buy 150 bales of cotton and send him the bill of lading. A failed
to release the bill of lading for several days after goods arrived in UK.
Held – A is in breach for not sending the bill of lading within reasonable time, which
in this case was 24 hours.
Callander v. Oelrichs (1835) Bing NC 58

P instructed A, who was in the US, to insure some cargo on special terms. A tried
to insure on special terms but couldn’t and insured on usual terms, but failed to
inform P about it.
Held – A was in breach of duty for failing to inform P that he was unable to carry
out instructions. This was a duty necessarily implied from the nature of the
engagement.
d) Duty to use Skill and Care
Every Agent acting for reward is bound to exercise such skill, care and diligence in
the performance of his instructions, as is usual or necessary, in or for the ordinary
and proper conduct of his profession or business, or is reasonably necessary for the
proper performance of the duties undertaken.
Degree of skill and care – Where the Agent is a professional acting for a reward, he
must exercise that degree of skill and care exercised by a person in his profession.
Others must exercise such degree of skill and care exercised by a reasonable person.
Exercise of Discretion - must exercise proper skill and care in exercising discretion.
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e) Gratuitous Agent’s Duty to use Skill and Care
A Gratuitous Agent is an Agent who carries on his obligations of agency, without

remuneration.
A Gratuitous Agent is liable to his Principal if in carrying out his work, he fails to
exercise that degree of skill and care, which may be expected of him in all the
circumstances.
Chaudhry v. Prabakhar (1989) 1 WLR 29

The defendant helped the plaintiff (who was his friend) purchase a car which was
un-roadworthy, without realizing it. It was gratuitous advice.
Held – (as above) defendant was held liable for negligence.
Donaldson v. Haldane (1840) 7 C & F 762

A writer to the Signet was employed to invest money. He did so without obtaining
security. He charged no fee for his services.
Held – he was still liable in negligence.
f) Information
An Agent must keep the Principal informed of matters which are of his concern.
2) FIDUCIARY DUTIES OF AN AGENT
a) Duty to account
i. When he keeps property and money of the Principal, the must be kept
separate from his own property and from that of other persons.
ii. Agent must preserve and render true accounts to the Principal of all his
dealings as Agent.
iii. Agent must produce for inspection all books and documents relating to the
Principal’s affairs.
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➢ The Duty to Account arises even if the instruction is not strictly legal.
De Mattos vs Benjamin (1894) QB 248

A turf commission agent is employed to place bets.
Held – He must account to the Principal for winnings received, though the bets were
void or though he could not recover losses paid in respect of bets.
Brown v IRC (1965) AC 244

A solicitor held client’s money in a client’s account and earned interest on it.
Held – he must account to the client for interest and cannot retain it for himself.
b) Duty not to make Secret Profits

An Agent must not, except with the full knowledge and consent of the Principal,
make any profit from a transaction entered into on behalf of a Principal or benefit
form confidential information received.
Hippisley v Knee Brothers (1905) 1 KB 1

H employed K as auctioneers and agreed to pay commission on sales and expenses.
K received discounts from printers and advertisers, but charged the full price from
H, honestly thinking he was entitled to do so.
Held – K must account to H for discounts.
➢ The Agent also cannot take bribes

Boston Deep Sea Fishing & Ice Co. v. Ansell (1888) 39 Ch.D 339
A, who was managing director of a company accepted commissions from persons
with whom he placed orders on behalf of the company. He was dismissed and was
sued by the company to recover commissions.
Held – Dismissal was justified. The Principal may,
a. Dismiss the Agent.

b. Refuse to pay the agreed remuneration.
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c. Recover the amount of the bribe.
Salford Cooperation v Lever (1891)
The plaintiff called for tenders for the supply of coal. L offered the manager one
shilling per ton, if his was successful. L was selected. On becoming aware, the
Corporation sued L
Held – the cooperation was entitled to recover 01 Shilling per ton. The tender would
have been lower by that amount if the bribe was not given. It was immaterial that
the amount was also recovered from the manager.
AG Hong Kong v. Reid (1994) 1 AC 324

R was convicted of accepting bribes given to him in the course of his position as a
public prosecutor in Hong Kong as an inducement to exploit his official position by
obstructing the prosecution of certain criminals. He was sentenced to eight years’
imprisonment and ordered to pay the Crown the sum of $HK12.4m, being the value
of assets then controlled by him which could only have been derived from bribes.
No payment to the Crown was made by R. The Attorney-General for Hong Kong
registered caveats on behalf of the Hong Kong government against the titles to three
properties in New Zealand registered in the names of R and his wife or his solicitor
which were alleged to have been bought with bribes received by R. In an application
in the High Court of New Zealand to renew the caveats the Attorney-General
claimed that the three properties, the value of which had increased since their
purchase, were held on a constructive trust in favour of the Crown. The respondents
claimed that the Crown had no equitable interest in the properties. The Lower
Courts held against the Attorney-General for Hong Kong. The Attorney-General
appealed to the Privy Council.
Held - when a fiduciary accepted a bribe as an inducement to betray his trust he held
the bribe in trust for the person to whom he owed the duty as fiduciary; and, if
property representing the bribe increased in value, the fiduciary was not entitled to
retain any surplus in excess of the initial value of the bribe because he was not
allowed by any means to make a profit out of a breach of duty. A bribe was a secret
benefit which the fiduciary derived from trust property or obtained from knowledge
which he acquired in the course of acting as a fiduciary and he was accountable under
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a constructive trust for that secret benefit to the person to whom the fiduciary duty
was owed as soon as the bribe was received, whether in cash or in kind, under the
equitable principle that equity considered as done that which ought to have been
done. If property representing the bribe increased in value or if a cash bribe was
invested advantageously the false fiduciary was accountable not only for the original
amount or value of the bribe but also for the increased value of the property
representing the bribe since otherwise, he would receive a benefit from his breach
of duty. Accordingly, the three properties so far as they represented bribes accepted
by R were held in trust for the Crown, which was entitled to have the caveats
renewed. The appeal would therefore be allowed.
c) Duty of Agent to avoid Conflicts of Interest
An Agent has a duty not to put himself in a situation where his duties conflict or his
interests and duties conflict, unless the Principal with full knowledge of all material
circumstances, consents.
➢ This duty covers conflict arising as a result of other clients as well as from
personal situations.
Solomons v. Pender (1865) 3 H & L 639

An Agent for sale, sells to a company of which he is a large shareholder.
Held – the sale is not binding on the Principal.
Saunders v. Perry (1967) 1 WLR 753

A solicitor employed an assistant to do the work of an important client. The assistant
agreed with the client that he will leave his employment with the solicitor, set up
practice and the client will transfer the work to him.
Held – the Assistant was in breach of the duty of good faith and fidelity and was
accordingly liable to the solicitor for the loss.
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d) Duty not to Delegate
➢ Agency is a contract of personal service and its obligations must be personally

performed. He may not delegate except with the permission of the Principal.
➢ Agent may delegate:
i) where the Principal knows at the time of appointment that the Agent
intends to delegate.
ii) where the authority conferred is of such a nature that it is necessary to
delegate.
iii) where use of sub agents is justified by usages of trade or customs.
iv) in unforeseen circumstances.
v) Where by the conduct of P and A, it may be reasonable to presume that
delegation was intended.
Catlin v. Bell (1815) Camp 183
A ship maker was authorized to sell goods.
Held – He had no implied authority to send them to another for sale and was liable
for the goods.
➢ Relationship between Principal and Sub Agent
i) The Sub Agent acts will bind the Principal if the appointment was
authorized or ratified as if performed by Agent.
ii) When the appointment is unauthorized.

- Acts will not bind the Principal
- Payments to sub agent will not be payments to the Principal.
- Agent liable for money received by the Sub Agent.
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3) ESTOPPEL OF AGENT FROM DISPUTING THE PRINCIPAL’S TITLE
➢ Where an Agent is in possession of property for or on behalf of the Principal, he is

estopped from asserting that he has better title to the property than his Principal.
➢ An Agent is estopped from asserting that a 3rd party has a better right than his
Principal to receive money held by him as Agent or owed by him as Agent.
William v. Pott (1871) L R 12 Eq 149
A receives rents of a certain property for over 12 years and accounts for them to B as
his Agent.
Held – B thereby receives good prescriptive title to the property in the absence of fraud,
even if A was the true owner.
Ward v. Carttar (1865) LR Eq 29
A solicitor paid off a mortgage debt due from a client and entered into possession of a
mortgaged property.
Held – He must be taken to have acted as the Agent of the client and therefore was not
a mortgagee in possession and he was not entitled to set up prescription in an action by
the client for possession of the land.
RIGHTS OF AN AGENT AGAINST THE PRINCIPAL
1. Right to Remuneration
i. An Agent has a right to remuneration for his services if the terms of the agreement
either expressly or impliedly so provide.
ii. Where an express term provides for remuneration an Agent cannot claim
remuneration other than in accordance with such terms.
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iii. If there is no express term in the agreement an entitlement to remuneration will arise
only if such a term can be implied into the contract. If such a term can be implied
the amount of remuneration also be determined in accordance with such implied
terms.
iv. In deciding what terms are to be implied court will have regard to the relevant
circumstances including prevalent customs and usages that may be applicable.
v. In the absence of any factors to the contrary a term will be implied that an Agent is
entitled to reasonable remuneration.
Bryant v. Flight (1839) 5 M & W 114
A was employed as a weekly manager and entered into an agreement which provided
“the amount of payment I am to receive I leave entirely for you to determine.” He
worked for six weeks.
Held – he was entitled to recover such amount as the employer acting in good faith
ought to have paid him.
Miller v. Beale (1879) 27 WR 403
A engages an auctioneer to sell property on his behalf. No specific agreement is

reached regarding remuneration.
Held – it is implied that A should pay the auctioneer the usual and reasonable
commission.
Bower v. Jones (1831) 8 Bing
A contract provided that an Agent should receive commission on all sales effected
by him. By custom of the trade no commission was payable on bad debts. The
principal did not pay commission in respect of bad debts.
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Held – the agent was entitled to commission on all sales affected by him including
those resulting in bad debts, as the trade custom was not consistent with the express
terms of the contract.
➢ An Agent is not entitled to remuneration in respect of:
i. Any unauthorized transactions which are not ratified by the principal.
ii. Any transaction in relation to which he is in breach of his duties going to the
root of the contract or otherwise justifying repudiation of the contract by the
principal.
Boston Deep Sea Fishing and Ice Company v. Ansell (1888) 38 Ch D 339
See - facts given previously.
Marsh v. Jeff (1862) 3 F & F 234
An auctioneer was engaged to sell property by auction. He sells it by a private contract.
Held – is not entitled to commission.
2. Right to Reimbursement
The Agent has a right to reimbursement of expenses and be indemnified in respect of

liabilities incurred in the course of agency.
➢ The Agent has a right against the Principal:
a) to be reimbursed all expenses; and
b) to be indemnified in respect of all losses and liabilities;
incurred by him in the execution of authority.

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➢ When the Agent is sued for money due to his Principal, the Agent has the right to
set off such expenses, losses and liabilities.
➢ Where the Agency is contractual, if these terms are not expressly stated, they will be
considered implied terms, unless clearly excluded.
➢ This right would include not only payments that the Principal is bound to make but
also those that the Agent is legally bound to make, although the Principal may not
be liable for it.
Adams v. Morgan & Co. (1923) 2KB 234

The Seller of a business is required by the agreement to carry it on during the date of
contract and the date of completion by buyer, for and on behalf of the buyer. The Agent
became liable to pay a super tax, which the Principal would not have been liable to pay,
had it carried the business on by itself. The contract provides an indemnity.
Held – the agent may recover super tax which he is obliged to pay, although the buyer,
which is a company, is not liable for it.
➢ The Agent may also recover expenses;

- which the agent paid according to usage.
- gratuitous payment made which are authorized.
Warlow v. Harrison (1859) 1E & E 309

An auctioneer is entrusted to sell certain property. After he incurs certain liabilities, his
agency terminated.
Held – He can recover the liabilities.
Rhodes v. Fielder, Jones & Harrison (1999) 89 LT KB 15

A country solicitor instructs a London solicitor and instructs him to engage Counsel.
The litigation is successful but certain costs are disallowed. The Country solicitor
purports to revoke authority to pay fees to Counsel. The London solicitor nevertheless
pays. Counsel could not have sued for fees.
Held – London solicitor is entitled to be indemnified for fees.
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➢ An Agent is not entitled to the reimbursement or indemnity if:
- The transaction is unauthorized, unless ratified.
- The loss is the consequence of his own negligence or default.
- Acts, which, to his knowledge are unlawful.
Warwick v. Slade (1811) 3 Camp 127

A authorizes B to affect a marine insurance policy. After underwriters have signed the
slips, but before a binding policy is given, his authority is revoked. He nevertheless
proceeds to affect the policy and pay the premium.
Held – he cannot recover the premium, as he acted without authority.
Barron v. Fitzgerald (1840) 6 Bing N.C. 201

A authorizes B and C to insure his life in their names. They insure in the names of B, C
and D and paid premium.
Held – they cannot recover the premium, not having strictly abided by the authority.
3. Agent’s Lien
➢ An Agent has a lien in respect of goods in his possession, for all lawful claims he
may have as an Agent, against;
- Remuneration; and
- Advances made, or losses and liabilities incurred, in the course of agency;
provided that,
• Possession is obtained lawfully;
• If possession is obtained in the same capacity as he claims the lien;
• There is no agreement inconsistent with a lien;
• Goods were not delivered with an express direction or for a special purpose,
inconsistent with a lien.
Williams v. Millington (1788) 1 H. Bl. 81

An auctioneer who sells goods has a lien over them for commission and charge.
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➢ Possession however may be held constructively.
Bryans v. Nix (1839) 4 M & W

B delivered goods to a Barge Master with documents of title, indicating that he was to
hold goods for and on behalf of A.
Held – Agent was entitled to a lien.
➢ A lien is extinguished or lost;

a) By payment of the sum due;
b) By acting in a manner inconsistent with the lien;
c) By waiver
d) Voluntarily parting with possession of goods subject to it.
RELATIONS BETWEEN PRINCIPALS AND THIRD PARTIES
1. Disclosed Principal
i) A Disclosed Principal, whether named or unnamed, may sue or be sued on

any contract made on his behalf, by his agent acting within the scope of his
authority.
ii) Similarly, a Disclosed Principal, whether named or unnamed, may sue or be

sued in respect of money paid or received on his behalf, by his agent acting
within the scope of his authority.
iii) The same position will arise when the unauthorised acts of an Agent are
ratified.
Stevenson vs Mortimer (1778) Cowp. 805

A customs officer took exorbitant fees from a shipmaster. The owner sued for the
excess.
Held – The owner had the right to sue to recover the excess amount.
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Coulthurst vs Sweet (1866) L.R. 1 C.P. 649
An agent appointed by the managing owner of a ship demanded excess freight from
the consignee of certain goods and refused to deliver the goods until payment was
made. The consignee paid the amount demanded, under protest and sued a part
owner of the ship for the excess.
Held – he was liable to refund the excess, though no portion of the money had
actually come into his hands.
iv) A Disclosed Principal however is not liable for the acts of an Agent outside
the scope of his Authority, unless the agent was acting within his Apparent
Authority or such unauthorised acts were validly ratified.
Daun vs Simmins (1879) 41 LT 783
The manager of a tied public house, who had authority to purchase spirits only from
the persons with whom the public house had a tie-up, bought spirits from an
outsider.
Held – that the Principal was not liable, it being usual for managers of such public
houses to be restricted in respect of persons from whom they may buy spirits.
2. Apparent Authority
i) Please see the note on Apparent Authority and the cases set out therein.
ii) It should be noted that the doctrine of Apparent Authority makes the
principal liable in situations where a Third Party transacts with a person, in
reliance of the Apparent Authority. Therefore, the Principal cannot sue the
Third Party in reliance of Apparent Authority.
3. Undisclosed Principal
An Undisclosed Principal generally refers to a Principal whose existence is unknown

to the Third Party with whom the Agent deals and so, in the eyes of the Third Party,
the Agent is the Principal. Common law doctrine on Undisclosed Principals confers
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rights and imposes liabilities on the Undisclosed Principal, notwithstanding that he
is not made a party to the relevant contract.
The rules governing the rights and liabilities between the Undisclosed Principal and
the Third Party are as follows:
i) Generally, an Undisclosed Principal can sue and be sued by the Third Party
under the contract, subject to exceptions mentioned in paragraph (iv) below.
These exceptions relate generally to situations where the identity of the party
to the contract is important to the Third Party.
ii) An Undisclosed Principal remains liable to a Third Party for the price of
goods sold or services provided under the contract made in the Agent’s
name with the Third Party. The Undisclosed Principal’s liability will not be
discharged even if he has made payment to the Agent with instruction that
the Agent pays over the same to the Third Party, if the Agent fails to pay the
Third Party as instructed.
iii) Where the existence and identity of the Principal becomes disclosed and
where the Third Party is to take action for recovery of any amount payable
to him under the contract, the Third Party can elect to sue either the
Undisclosed Principal, or the Agent.
iv) There are cases when an Undisclosed Principal may not sue or be sued by
the Third Party under the contract made by the Agent in the Agent’s name
with the Third Party. A major category is where the identity of the party in
a contract is material. The following are examples of such cases:
• A promise by the Third Party to lend money to the Agent personally

cannot be enforced by an Undisclosed Principal.
• A contract involving a strictly personal skill or service cannot be

performed by an Undisclosed Principal.
• Where the landlord is induced by the identity, creditworthiness and

reputation of the tenant (who is in fact an Agent) to enter into a tenancy
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agreement with him, an Undisclosed Principal may not be able to replace
the agent as tenant under the tenancy.
• If the Undisclosed Principal or Agent is aware that the Third Party will
not contract with the Undisclosed Principal for whatever reasons, the
Undisclosed Principal cannot make use of an Agent to procure the
contract with the Third Party.
Curtis vs Williamson (1874) LR 10 QB 57
Gunpowder is bought by a person who appears to be acting on his own account.

Later, the seller discovers that the buyer acted the agent for certain mine owners. He
sued the mine owners.
Held – The seller was entitled to sue the mine owners.
Kinahan & Co. vs Parry (1910) 2 K.B. 389
A appointed B as the manager of a hotel owned by A. The license was taken out in
the name of B, who appeared to be the principal. A told B to purchase spirits only
from a certain brewery. B bought spirits from C, an outsider.
Held – A was liable to C for the price of Whisky.
[However, please note that an Undisclosed Principal cannot ratify an unauthorised

contract of the Agent.]
RELATIONS BETWEEN PRINCIPALS AND THIRD PARTIES
1. Disclosed Principal
i) Where an Agent makes a contract on behalf of a Disclosed Principal,

whether named or unnamed, he is not liable on it. Neither can he sue on it.
ii) However, there is nothing preventing an Agent from agreeing with the Third
Party in a same contract or in a different contract that, in addition to the
Principal, the Agent will have rights or liabilities on the contract.
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iii) Additionally, where the Principal is non-existent or fictitious, the Agent will
be liable on the contract.
[see – Kelner vs Baxter above.]
iv) Also, though a person purports to act as an Agent, but is the real Principal,
he would obviously be liable on the contract.
2. Undisclosed Principal
Where the Principal is undisclosed and the existence and identity of the Principal
later becomes disclosed, the Third Party can elect to sue either the Undisclosed
Principal, or the Agent.
[Also see - the position relating to Undisclosed Principals, in the note above.]
3. Breach of Warranty of Authority
i) Where a person purports to act as an Agent on behalf of a Principal, he

obviously represents that such Principal exists and that he has authority to
act on behalf of such Principal. This is called the ‘Warranty of Authority’
and arises by implication, every time an Agent purports to act on behalf of
a Principal.
ii) If at any time, either of these elements are found to be incorrect, there is a
Breach of such Warranty of Authority and the Agent becomes liable to the
Third Party for losses arising from the breach.
Richardson vs Williamson (1871) L.R. 6 Q.B. 276

A person sent money to a building society and received a certificate of deposit signed
by two directors. The society had no borrowing powers.
Held – The directors were personally liable to the depositor, on the implied warranty
that they had authority to borrow on behalf of the building society.
[see also – Yonge vs Toynbee set out previously]
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iii) Where a Principal subsequently ratifies an unauthorised act of an Agent, the
Agent will not be liable for breach of Warranty of Authority.
iv) Additionally, where the Third Party was aware that the Principal had not
granted authority to the Agent at the time the Agent entered into the
contract, the Agent will not be liable for breach of Warranty of Authority.
Halbot vs Lens (1901) 1 Ch, 344

A signed a composition with B, on behalf of X, while both A and B were well aware
that X had already refused to enter into such a composition, and taking the risk that
he would again refuse to be bound by it.
Held – A was not liable for breach of warranty of authority, as he did not warrant
that he had such authority. Nor did he warrant that X will accept such agreement.
TERMINATION OF AGENCY
1. Termination of Actual Authority
A. The Actual Authority of an Agent may be terminated;
i) by agreement between Principal and Agent.

ii) if given for a particular transaction; by completion.
iii) if for a limited period, upon expiry; and in any case, upon the lapse of a
reasonable period.
iv) upon the happening of an event, which was agreed between parties or where
it should be reasonably be inferred that the Principal would not wish it to
continue.
v) By destruction of the subject matter.
vi) by the happening of an event which renders the agency unlawful or
impossible to perform
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B. Actual Authority is also terminated, unless it is irrevocable,
i) By death of the Principal or Agent;
ii) By mental incapacity of the Principal or Agent;
iii) By dissolution (of a corporate body);
iv) By notice of revocation of authority, whether given by the Principal in
breach or otherwise;
v) By renunciation, whether given by the Agent in breach or otherwise.
Blackburn v. Scoles (1810) 2 Camp 341

A broker is employed to sell goods.
Held - His authority is terminated soon after the sale is complete. And needs further
authority to act further.
Drew v. Nunn
Even if Actual Authority is terminated – Apparent Authority continues, if termination
is not known to Third Parties who dealt with the Agent previously.
(For Facts – see previous note)
Yonge vs Toynbee (1910) 1 KB 215

Plaintiff commenced a defamation case and entrusted solicitors to act. During
proceedings, unknown to the solicitors, the Plaintiff became insane. Therefore, the case
was struck off. The defendants claimed costs from the solicitors.
Held – the defendant was entitled to recover costs from the solicitors as there was a
breach of their warranty of authority.
C. When authority cannot be terminated
When authority granted is coupled with an interest of an Agent, the Agent’s

authority has been held to be irrevocable, if granted by Deed or for Valuable
Consideration.
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Gaussen v. Morton (1830) 10 B & C 731
A being indebted to B, gives him a power of attorney to sell certain lands and discharge
the debts out of the purchase money.
Held – The power of attorney is irrevocable
2. Termination of Apparent Authority
Must be done by giving public notice.

(See – note on Apparent Authority)
……………………
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DUTIES OF AN AGENT TOWARDS THE PRINCIPAL

a) Contractual Agent’s Duty to Perform

An Agent who is appointed by a Contract is bound to act in accordance with its

Bertram Armstrong v. Godfrey (1830) 1 Knapp 381

Ferrers v. Robbins (1835) 2 CM & R 152

Overend, Gurney & Co v. Gibb & Gibb (1872) LR 5 HL 480

b) The Agent’s Duty to obey Instructions

Barber v. Taylor (1839) 5 M & W 527

Callander v. Oelrichs (1835) Bing NC 58

d) Duty to use Skill and Care

A Gratuitous Agent is an Agent who carries on his obligations of agency, without

Chaudhry v. Prabakhar (1989) 1 WLR 29

Donaldson v. Haldane (1840) 7 C & F 762

2) FIDUCIARY DUTIES OF AN AGENT

De Mattos vs Benjamin (1894) QB 248

Brown v IRC (1965) AC 244

b) Duty not to make Secret Profits

Hippisley v Knee Brothers (1905) 1 KB 1

➢ The Agent also cannot take bribes

Held – Dismissal was justified. The Principal may,

a. Dismiss the Agent.

Salford Cooperation v Lever (1891)

AG Hong Kong v. Reid (1994) 1 AC 324

c) Duty of Agent to avoid Conflicts of Interest

Solomons v. Pender (1865) 3 H & L 639

Saunders v. Perry (1967) 1 WLR 753

➢ Agency is a contract of personal service and its obligations must be personally

➢ Agent may delegate:

Catlin v. Bell (1815) Camp 183

A ship maker was authorized to sell goods.

➢ Relationship between Principal and Sub Agent

ii) When the appointment is unauthorized.

➢ Where an Agent is in possession of property for or on behalf of the Principal, he is

William v. Pott (1871) L R 12 Eq 149

Ward v. Carttar (1865) LR Eq 29

RIGHTS OF AN AGENT AGAINST THE PRINCIPAL

Bryant v. Flight (1839) 5 M & W 114

Miller v. Beale (1879) 27 WR 403

A engages an auctioneer to sell property on his behalf. No specific agreement is

Bower v. Jones (1831) 8 Bing

➢ An Agent is not entitled to remuneration in respect of:

i. Any unauthorized transactions which are not ratified by the principal.

See - facts given previously.

Marsh v. Jeff (1862) 3 F & F 234

An auctioneer was engaged to sell property by auction. He sells it by a private contract.

Held – is not entitled to commission.

The Agent has a right to reimbursement of expenses and be indemnified in respect of

➢ The Agent has a right against the Principal:

a) to be reimbursed all expenses; and

b) to be indemnified in respect of all losses and liabilities;

incurred by him in the execution of authority.

Adams v. Morgan & Co. (1923) 2KB 234

➢ The Agent may also recover expenses;

Warlow v. Harrison (1859) 1E & E 309

Rhodes v. Fielder, Jones & Harrison (1999) 89 LT KB 15

Warwick v. Slade (1811) 3 Camp 127

Barron v. Fitzgerald (1840) 6 Bing N.C. 201

Williams v. Millington (1788) 1 H. Bl. 81

Bryans v. Nix (1839) 4 M & W

➢ A lien is extinguished or lost;

RELATIONS BETWEEN PRINCIPALS AND THIRD PARTIES

i) A Disclosed Principal, whether named or unnamed, may sue or be sued on

ii) Similarly, a Disclosed Principal, whether named or unnamed, may sue or be