BUSSINESS LAW

UNIT – III
DUTIES OF AN AGENT

Malavika.M
Asst. Prof.
Dept. of Management Studies
Bhisop Heber College, Trichy

Trichy 2 .M. Dept. Asst. of Management Studies. DUTIES OF AN AGENT  Duty to act according to directions or custom of trade (Section 211)  Duty to act with reasonable care & skill (Section 212)  Duty to render account (Section 213)  Duty to communicate with principal & to obtain principal’s instructions (Section 214) Malavika. Prof.. Bishop Heber College.

Dept. of Management Studies. Trichy 3 . DUTIES OF AN AGENT….  Duty to disclose all material circumstances & to obtain in principal’s consent in personal dealings (Section 215 & 216)  Duty to pay sum received for principal (Section 217 & 218)  Duty to protect & preserve the interest entrusted to him (Section 209)  Duty not to delegate (Section 190) Malavika. Bishop Heber College..M. Prof. Asst.

TO ACT ACCORDING TO THE DIRECTIONS OR CUSTOMS OF TRADE (SEC 211)  To follow principal’s directions  An agent must act within the scope of the authority conferred on him. Dept. Bishop Heber College. The goods were destroyed.. of Management Studies. He failed to do so. Trichy 4 . Malavika.  Example: An agent was instructed to insure goods. Asst. He was liable to compensate to the principal for the loss made by him.M. Prof.

Asst.M. A must make compensation of his principal in respect of any loss thereby sustained.. Malavika. without making the proper & usual enquires as to the solvency of B. TO ACT WITH REASONABLE CARE & SKILL (SECTION 212)  Example: A. Prof. an agent for the sale of goods. Bishop Heber College. of Management Studies. sells to B on credit. is insolvent. Dept. Trichy 5 . B at the time of such sale. having authority to sell on credit.

Dept. TO COMMUNICATE WITH PRINCIPAL & TO OBTAIN PRINCIPAL’S INSTRUCTIONS (SECTION 214)  An agent is bound to use all reasonable diligence to establish contact with his principal to obtain his instructions.. Asst. Malavika. Trichy 6 . of Management Studies. TO RENDER ACCOUNT (SECTION 213)  To keep & render accounts to principal when demanded. Prof. Bishop Heber College.M.

M. Asst. Dept. A after knowing this compel B to sell it to him at the price B gave it for.TO DISCLOSE ALL MATERIAL CIRCUMSTANCES (SECTION 215 & 216)  Not to deal on his own account  If an agent wants to deal on his own account. he must seek the consent of the principal first & must acquaint him with all the material facts.. his agent to buy a house for him. ( Purchase )  Example: A directs B. B tells A it cannot be bought & buys the house for himself. Malavika. Prof. of Management Studies. Bishop Heber College. Trichy 7 .

Bishop Heber College.M. TO PAY SUM RECEIVED (SECTION 218)  To pay sum received  He can deduct his remuneration & all expenses incurred in conducting business. Malavika. Asst. Dept. Trichy 8 . of Management Studies.. Prof.

Dept. Malavika. Bishop Heber College. Trichy 9 . of Management Studies..M. Prof. Asst. the agent has to take on behalf of the late principal to protect & preserve the interests entrusted to him. TO PROTECT & PRESERVE THE INTEREST (SECTION 209)  When an Agency is terminated by the principal dying or becoming unsound of mind.

Dept. of Management Studies. Malavika.. Trichy 10 . Asst. Bishop Heber College.NOT TO DELEGATE AUTHORITY (SECTION 190)  An Agent cannot lawfully employ another to perform acts which he has undertaken to perform personally unless the nature of agency so requires. Prof.M.

Trichy 11 . Prof. Bishop Heber College. Malavika. Dept. of Management Studies..M. PERSONAL LIABILITY OF AN AGENT  In case of Foreign Principal (Section 230)  In case of Undisclosed Principal (Section 230)  In case of Incompetent Principal (Section 230)  In case of Principal not in Existence  In case of Acts not Ratified (Section 235)  In case of Acts in his Own Name  In case of Express Agreement  In case of custom or Usage of Trade. Asst.