Your Favorite

In: Novels

Submitted By tengkusyifaa
Words 537
Pages 3
Whether Don make any ‘secret profit’ or not out of his performance of his duty.
According to section 135 of Contract Act, an agent is a person employed to do any act for another or to represent others in dealing with third persons.
One of the duties agent toward his principal is an agent cannot make any ‘secret profit’ out of performance of his duty. Secret profit means any bribe or secret commission or any financial advantage which is over and above the commission agreed under agency contract. An agent is not allowed to receive any amount of secret profit from any 3rd party when dealing on behalf of his principal without his knowledge. However if the principal knows of the profit gained by the agent, and the principal consent to it, it is no longer ‘secret’ and therefore no breach of duty by the agent.
According to section 168 of contract act, if an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that dealing of the agent have been disadvantageous to him.
If the agent received profit and the principal does not consent to it, the principal may repudiate the contract which was made on his behalf by the agent with a 3rd party
This can be referred with the case Shipway v Broadwood. In this case, B contracted to buy horses from S if they were tested to be sound by B’ agent, a veterinary surgeon. When the horses were tested as sound, B sent a cheque to S for the price. Subsequently the horses were found unsound and were returned. The cheque was stopped. Actually the agent had been bribed by S. S brought a legal action on the cheque. It was held that…...

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