TUTORIAL AGENCY – WEEK 4

NUR AQILAH IZZATI BINTI MOHD RADZI (UDE210082)

Answer all questions

1. What will be the remedy available if the agent accepted a commission from a
supplier without permission of the principal?

A. The principal may recover the amount of secret commission.

B. The agent may initiate legal action against the principal.
C. The principal and the agent have agreed on mutual consent.
D. The contract has been revoked by the third party.

2. Could the agent keep the secret profit paid by the third party?

A. Subject that the agent performs his duty within the apparent authority.
B. Subject that the agent repudiates the contract with the third party.
C. Subject that the agent acting in good faith;
D. Subject that the agent obtained the principal’s consent to the same.

3. Where there is no such contract of agency, the rights, and duties of an agent to his
principal and vice versa are laid down in: -

A. Section 150 to 178 of the Contracts Act, 1950;

B. Section 164 to 178 of the Agency Act, 1951;
C. Section 164 to 178 of the Contracts Act, 1950.
D. Section 170 to 178 of the Agency Act, 1951.

4. The creation of the agency except __________________.

A. By express appointment;
B. By implied appointment;
C. By ratification;
D. By revocation.

5. What is the basis of the relation between the principal and the agent?

A. Intention
B. Uberimae fidei
C. Illegal
D. Fiduciary
6. Agency is terminated by _____________ when the principal dies.

A. Operation of law
B. Renunciation by the agent.
C. Mutual consent;
D. Revocation by the principal.

Question 7

(a) Explain any five (5) duties of an agent towards his principal as provided in the
Contracts Act 1950.

One of the duties of an agent towards his principal as provided in the

Contracts Act 1950 is under Section 166, which is agent’s accounts. An agent is
bound to render proper accounts to his principal on demand.

Next, is under Section 167, which is agent’s duty to communicate with

principal. 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.

Besides that, is under Section 170, which is Agent’s right of retainer out of
sums received on principal’s account. An agent may retain, out of any sums received
on account of the principal in the business of the agency, all moneys due to himself in
respect of advances made or expenses properly incurred by him in conducting such
business, and also such remuneration as may be payable to him for acting as agent.

Along with that, is under Section 171, which is agent’s duty to pay sums
received for principal. Subject to the deductions specified in Section 170, the agent is
bound to pay to his principal all sums received on his account.

Last but not the least, is under Section 174, which is Agent’s lien on
principal’s property. In the absence of any contract to the contrary, an agent is entitled
to retain goods, papers, and other property, whether movable or immovable, of the
principal received by him, until the amount due to himself for commission,
disbursements, and services in respect of the same has been paid or accounted for to
him.

(10 marks)

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(b) With the reference to the Contracts Act 1950, discuss the creation of contract of
ratification.

First and foremost, under Section 149 is the right of person as to acts done for
him without his authority. The effect of ratification is where acts are done by one
person on behalf of another but without his knowledge or authority, he may elect to
ratify or to disown the acts. If he ratifies them, the same effects will follow as if they
had been performed by his authority.

Next, under Section 150 is ratification may be expressed or implied.

Ratification may be expressed or may be implied in the conduct of the person on
whose behalf the acts are done. To illustrate, A, without authority, buys goods for B.
Afterwards B sells them to C on his own account; B’ s conduct implies a ratification
of the purchase made for him by A. Another way to illustrate is when A, without B’s
authority, lends B’s money to C. Afterwards B accepts interest on the money from C.
B’s conduct implies a ratification of the loan.

Moreover, under Section 151, is when knowledge requisite to valid

ratification. No valid ratification can be made by a person whose knowledge of the
facts of the case is materially defective.

Furthermore, under Section 152 is the effect of ratifying unauthorized act

forming part of a transaction. When a person ratifying any unauthorized act done on
his behalf ratifies the whole of the transaction of which the act formed a part.

Last but not the least, under Section 153 is ratification of unauthorized act
cannot injure third person. An act done by one person on behalf of another, without
that other person’s authority, which, if done with authority, would have the effect of
subjecting a third person to damages, or of terminating any right or interest of a third
person, cannot, by ratification, be made to have that effect.

(10 marks)

Total: 20 marks

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Question 8

Roland appointed Mojo as an agent to sell his house for at least RM900,000. Roland
promises to pay her a commission of 2% of the sale price. Mojo told Roland that there was no
interested buyer for the house, except for a person called Leesa. Mojo told Roland that Leesa
had offered RM880,000 for the house. Roland believed Mojo and he sold the house to Leesa
for RM880,000. Roland paid Mojo RM18,000 as her commission.

Later, it came to Roland’s knowledge that there were other interested buyers and that they
had contacted Mojo to discuss the price. One of them, Mohan, had offered to pay RM920,000
for the house. Upon further investigation, Roland discovered that Leesa is Mojo’s sister-in-
law. Leesa subsequently sold the house to Mohan for 950,000. Now, Roland wants to know
whether he could take any legal action against Mojo.

Total: 20 marks

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