Duties of Principal

A principal is under a duty to pay the agent’s commission

once the agent completed his contractual duties.

This is provided under section :

• section 170

• section 171

• section 172

• section 173

Section 173 provides :

• agent must perform his duties to get the commission

• agent entitled to the commission as agreed under the contract of agency

• agent is not entitled to the commission if he is guilty of misconduct towards the principal

• agent is entitled to be reimbursed for any cost due under the contract

An agent managed to get a contract for the principal according to the

mandate of his principal. However, the principal kept on rejecting the contracts

brought to him by the agent .

In this situation, the principal has breached his duty for..

• not acting in good faith

• not acting wisely

• wilfully preventing his agent from earning his commission

• wilfully preventing his agent from getting another principal

The duty to indemnify the agent

is provided under …

• section 172

• section 173

• section 175

• section 177

The followings are the situations where an agent

is entitled to be indemnified by the principal, except…

• the agent suffers injury due to the principal’s negligence

• the agent has to indemnify the third party’s injury / losses in performance of his duties

• the agent was negligent

• the agent incurred losses or liabilities in performance of his duties

If the agent was employed to do any criminal act,

the principal is not liable to indemnify the agent.

The relevant authority is :

• section 172

• section 173

• section 175

• section 177

If an agent incurred losses while performing his duties,

the principal must indemnify the losses.

This was held in the case of :

• Andrews v Ramsay

• De Buscche v Alt

• Armstrong v Jackson

• Kyall & Evatt v Lim Kim Keat

An agent has used his money to pay to the third party a sum of RM2000

as a deposit for the rental payment of an apartment,

according to his principal’s order.

In the above situation, the principal is under a duty to :

• to pay the agent’s commission

• to prevent the agent from paying the deposit

• to reimburse the agent’s money

• to cancel the booking.

A principal appointed an agent to sell his business premise to a third party.

While bringing the third party to have a look at the premise, a window glass fell

down from the top of the building. Both of them were injured in the incident.

The principal is …

• Liable to indemnify the medical costs of their injuries

• Not liable to pay anything

• Entitled to terminate the agent’s authority

• Under a duty to give a discount to the third party

If a principal appointed more than one agent to sell his property to a 3rd party,

the principal is liable for breach of his duty.

• Yes

• No