Eight Important Duties of an Agent Towards the Principal Essay

1. responsibleness to follow primary(prenominal)s directions or springers (Sec. 211) The first duty of every element is to minute within the scope of the authority conferred upon him and bring about the agency work according to the directions given by the pass. When the doer acts otherwise, if whatsoever handout be sustained, he moldiness hire it trusty to the principal, and if any profit accrues, he must account for it. Illustrations (a) Where the principal instructed the means to wareho give the goods at a particular place and the agent ware homed them at a different warehouse which was equally safe, and the goods were destroyed by fire without negligence, it was held that the agent was apt for the loss because any departure from the instructions makes the agent absolutely liable (Lilley vs Doubleday). (b) An agent being instructed to subvention goods neglects to do so. He is liable to compensate the principal in the event of these being lost (Pannalal Jankidas vs Mo hanlal).If the principal has not given any express or implied directions, then it is the duty of the agent to follow the routine prevailing in the same kind of business at the place where the agent digests business. If the agent makes any departure, he does so at his own risk. He must make good any loss so sustained by the principal.Illustrations (Appended To Sec. 211) (a) A, an agent, engaged in carrying on for B a business, in which it is the custom to invest from time to time at interest, the moneys which may be in hand, omits to make such investments. A must make good to B the interest usually obtained by such investments. (b) B, a broker, in whose business it is not the custom to sell on credit, sells goods of A on credit to C, whose credit at the time was very high. C, before payment, becomes insolvent. B must make good the loss to A, ir detective of his good intentions. 2. Duty to carry out the work with well-founded skill and diligence (Sec. 212) The agent must conduct th e business is generally possessed by persons engaged in similar business, unless the principal has notice of his essential of skill. Further, the agent must act with reasonable diligence and to the best of his skill.If the agent does not work with reasonable care, skill (unless the principal has notice of his want of skill) and diligence, he must make compensation to his principal in respect of direct consequences of his own neglect, want of skill or misconduct. But he is not so liable for indirect or remote losses. Illustrations (Appended To Sec. 212) (a) A, a merchant in Kolkata, has an agent B, in London, to whom a sum of money is paid on As account, with orders to remit. B retains the money for a goodish time. A, in consequence of not receiving the money, becomes insolvent. B is liable for the money and interest from the day on which it ought to let been paid, according to the usual rate, and for any further direct loss such as loss by variation of rate of exchange, but nothin g further.(b) A, an agent for the sale of goods, having authority to sell goods on credit, sells to B on credit, without making the proper and usual enquiries as to the solvency of B. B, at the time of such sale, is insolvent. A must make compensation to his principal in respect of any loss thereby sustained. 3. Duty to present Accounts (Sec. 213) It is the duty of an agent to keep proper accounts of his principals money or property and grant them to him on demand, or periodically if so provided in the agreement. 4. Duty to communicate (Sec. 214) It is the duty of an agent, in cases of difficulty, to use all reasonable diligence in communicating with his principal, and in seeking to obtain his instructions, before winning any steps in facing the difficulty or emergency. 5. Duty not to deal on his own account (Sees. 215 and 216)An agent must not deal on his own account in the business of agency i.e., he must not himself buy from or sell to his principal goods he is askedto sell or buy on behalf of his principal without obtaining the consent of his principal after disclosing all natural points to him. If the agent violates this rule, the principal may withdraw from the transaction where it can be shown that any material fact has been knowingly concealed by the agent, or that the dealings of the agent have been disadvantageous to the principal. The principal is as well entitled to claim from the agent any benefit which may have resulted to him from the transaction. Illustrations (a) A, directs B to sell As estate. B buys the estate for himself in the name of . 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 disavantageous to him. Illustration (a) Appended to share 215 (b)A directs, B, his agent, to buy a certain house for him. B tells A that it cannot be bought and buys the house for himself. A may, on discovering that B has bough t the house, compel him to sell it to A at the price he gave for it. Illustration appended to Section 2166. Duty not to make any profit out ofhis agency except his remuneration(Sees. 217 and 218)An agent stands in a fiduciaryrelation to his principal and thereforehe must not make any profit (secretprofit) out of his agency. He mustpay to his principal all moneys(including illegal gratification, if any) current by him on principalsaccount.He can, however, deduct all moneysdue to himself in respect of hisremuneration or/and expensesproperly incurred. If his acts are notbonafide, he leave behind lose hisremuneration and will have toaccount for the secret profit to hisprincipal.7. Duty on termination of agency byprincipals death or insanity (Sec.209)When an agency is terminated by theprincipal dying or becoming ofunsound mind, the agent must take,on behalf of the representatives ofhis late principal, all reasonablesteps for the shield andpreservation of the interestsentrusted to him.8 . Duty not to delegate authority(Sec. 190)Subject to six exceptions statedearlier (under the brain Delegationof Authority), an agent must notfurther delegate his authority toanother person, but perform the workof agency himself.