Law of Agency

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Law of Agency by Mind Map: Law of Agency

1. Duties of Principal & Agent

1.1. Duties of Agent

1.1.1. Section 164 obeying principal instruction in which failure will result to breach of contract and agent will be liable for any loss suffered by principal Case : Turpin v Bilton (1843)

1.1.2. Section 165 exercise care and diligence in carrying out his work and to use such skill as he possess Case : Chaudhry v Prabhakar (1989)

1.1.3. Section 166 agent is under duty to account all monies and properly handled by him as agent for principal and to produce such accounts when demanded by principal Case : Foley v Hill (1848)

1.1.4. Section 167 communicate with principal in case difficult when obtaining instructions from principal. agent may also use own discretion in adopting course of action to safeguard principal interest in emergencies.

1.1.5. Section 168 not to make any secret profit out of performance of his duty. But if principal knows and consents, the agent is entitled to keep the profit he makes.

1.1.6. Section 169 duty of agent to act solely for the benefit of principle and cannot allow his own personal interest to conflict with duty.

1.1.7. Section 170 to retain out of any sum received on the account of the principle in the business of agency, all monies due to himself in respect of advances made properly incurred by him in conducting the business.

1.1.8. Section 171 pay principal all sum received on his behalf. But an agent may retain or deduct from such sum received, advance made incurred by him for acting as agent.

1.2. Duties of Principal

1.2.1. To pay the agent the commission or other remuneration agreed, unless the agency relationship is gratuitous.

1.2.2. Not to wilfully prevent or hinder the agent from earning his commission.

1.2.3. To respect any lien the agent has over the property of the principal in the actual or constructive possession of the agent.


3. Actual

3.1. Authority expressly given by the principal (orally or in writing), or implied from the express authority given, from the circumstances of the case, custom or usage of trade and the conduct of parties.

4. apparent

4.1. Authority which is not expressly given by the principal but which the law regards the agent as possessing although the principal has not consented to his exercising such authority

5. Temination of Agency

5.1. By mutual consent from both parties

5.2. By revocation by the principal

5.3. By the performance of the contract of agency, available when agency is created for single specific transaction

5.4. By the death of either principal or agent

6. Agency in relation to Banking

6.1. Bank as agent for customer

6.1.1. Bank as agent for customer is where a banker inevatably acts as his customer agent

6.2. Bank employees as agents for the bank

6.2.1. Bank employees as agents where employees are authorized to act on behalf of the bank and be vicariously liable for the torts committed.