Discuss the principal’s rights and duties towards agent?

Discuss the principal’s rights and duties towards agent? .

1. Right of Principal when Agent Deats on his Own Account in the Business of the Agency without Principal’s Consent —S. 215 says that if, an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject —the principal may repudiate the transaction if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that, the dealings of the agent have been disadvantageous to him.

For Examples—(i) A directs B to sell A’s estate. B buys the estate for himself in the name of C.A, on discovering that B has bought the estate for himself, may repudiate the sale, if he can show that B has dishonestly concealed any material fact, or that the sale has been disadvantageous to him.

(ii) A directs B to sell A’s estate. B, on looking over the estate before selling it, finds a mine on the estate which is unknown to A. B informs A that he wishes to buy the estate for himself, but conceals the discovery of the mine. A allows B to buy, in ignorance of the existence of the mine. A, on discovering that B knew of the mine at the time he bought the estate, may either repudiate or adopt the sale at his option. 2. Principal’s Right to Benefit Gained by Agent Dealing on “his bwn.

Account in the Business of Agency–S.216 provides that if an agent, without the knowledge of the principal, deals in the business of the agency on his own account instead of an account of his principal, —the principal is entitled to claim from the agent benefit which may have resulted to him from the transaction, e.g., (i) A directs B, his agent, to buy certain house for him. B tells A, it cannot be bought, and buys the house for himself. A may, on discovering that B has bought the house, compel him to sell it to A at the price he gave for it.

(ii) Andrews Vs. Ramsey, (1903) 2K. B. 635-A, the plaintiff engaged B, an auctioneer, to sell some property on the terms that he should receive his due commission of £ 50; B, however, received secretly £ 20 as commission from the purchaser. In a suit by A against B, it was held that B was not entitled to his £ 50 promised and was bound to pay£ 20 to his employer. A. Principal’s Duties to Agent-The following are the duties of the principal’s towards agent-1. Agent to be Indemnified Against

Consequences of Lawful Acts — According to S. 222, the employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in the exercise of the authority conferred upon him.

For Examples—(i) B, at Singapur, under instructions from A of Calcutta, contracts with C to deliver certain goods to him. A does not send the goods to B, and C sues for breach of contract. B informs A of the suit and A authorizes him to defend the suit. B defends the suit, and is compelled to pay damages and costs, and incurs expenses. A is liable to B for such damages, costs and expenses.

(ii) B, a broker at Calcutta, by the orders of A, a merchant there, contracts with C for the purchase of 100 casks of oil for A. Afterwards A refuses to receive the oil, and C sues B. B informs A. who repudiates the contract altogether. B defends but unsuccessfully, has to pay damages and costs and incurs expenses. A is liable to B for such damages costs and expenses.

2. Agent to be Indemnified Against Consequences of Acts Done in Good Faith —According to 5.223, where one person employs another to do an act, and the agent does the in good faith, the employer is liable to indemnify the same agent against the consequences of that act, though it causes an injury to the rights of third persons.

For Example — ‘ (i) A, a decree holder, and entitled to execution of B’s “goods, requires the officer of the Court to seize certain goods representing them to be the goods of B. The officer seizes the goods, and is sued by C, the true owner of the goods. A is liable to indemnify the officer for the sum which he is compelled to pay to C, in consequence of obeying A’s directions. (ii) B, at the Request of A, sells goods.in the possession of A,’ but which A had no right to dispose of. B does not know this, and hands over the proceeds of the sale to A. Afterwards C, the true owner of the goods, sues B and recovers the value of the goods and costs A is liable to indemnify B for it has been compelled to pay to C and for B’s own expenses.

3. Non-liability of Employer of Agent to do a Criminal Act—S. 224 says that where one person employs another to do an act which is criminal, the employer is not liable to the agent, either upon an express or an implied promise, to indemnify him against the consequences of that act.

For Examples–(i) A employs B to beat C, and agrees to indemnify him against all consequences of the act. B thereupon beats C, and has to pay damages to C for so doing. A is not liable to indemnify B for those damages.

(ii) B. the proprietor of a newspaper, publishes, at A’s request, a libel upon C in the paper, and A agrees to indemnify B against the consequences of the publications, and all costs and damages of any action in respect thereof. B is sued by C and has to pay damages, and also incurs expenses. A is not liable to B upon the indemnity : S. 224.

4. Compensation to Agent for Injury Caused by Principal’s Neglect—s. 225 provides that the principal must make compensation to his agent in respect of injury caused to such agent by the principal’s neglect or want of skill, e.g., a employs B as a bricklayer in building a house, and puts up the scaffolding himself. The scaffolding is unskilfully put up, and B is in consequence hurt A must make compensation to B.