Eight Important Duties of an Agent Towards the Principal
1. Duty to follow principal’s directions or customs (Sec. 211):
The first duty of every agent is to act within the scope of the authority conferred upon him and perform the agency work according to the directions given by the principal.
When the agent acts otherwise, if any loss be sustained, he must make it good to the principal, and if any profit accrues, he must account for it.
Illustrations:
(a) Where the principal instructed the agent to warehouse the goods at a particular place and the agent warehoused them at a different warehouse which was equally safe, and the goods were destroyed by fire without negligence, it was held that the agent was liable for the loss because any departure from the instructions makes the agent absolutely liable (Lilley vs
Doubleday).
(b) An agent being instructed to insure goods neglects to do so. He is liable to compensate the principal in the event of these being lost
(Pannalal Jankidas vs Mohanlal).
If the principal has not given any express or implied directions, then it is the duty of the agent to follow the custom prevailing in the same kind of business at the place where the agent conducts business. If the agent makes any departure, he does so at his own risk. He must make good any loss so sustained by the principal. Illustrations (Appended To Sec. 211):
(a) A, an agent, engaged in carrying on for B a business, in which it is the custom to invest from time to time at interest, the moneys which may be in hand, omits to make such investments. A must make good to B the interest usually obtained by such investments. (b) B, a broker, in whose business it is not the custom to sell on credit, sells goods of A on credit to C, whose credit at the time was very high. C, before payment, becomes insolvent. B must make good the loss to A, irrespective of his good intentions. 2. Duty to carry out the work with reasonable skill and diligence (Sec.
212):
The agent must conduct the
The first duty of every agent is to act within the scope of the authority conferred upon him and perform the agency work according to the directions given by the principal.
When the agent acts otherwise, if any loss be sustained, he must make it good to the principal, and if any profit accrues, he must account for it.
Illustrations:
(a) Where the principal instructed the agent to warehouse the goods at a particular place and the agent warehoused them at a different warehouse which was equally safe, and the goods were destroyed by fire without negligence, it was held that the agent was liable for the loss because any departure from the instructions makes the agent absolutely liable (Lilley vs
Doubleday).
(b) An agent being instructed to insure goods neglects to do so. He is liable to compensate the principal in the event of these being lost
(Pannalal Jankidas vs Mohanlal).
If the principal has not given any express or implied directions, then it is the duty of the agent to follow the custom prevailing in the same kind of business at the place where the agent conducts business. If the agent makes any departure, he does so at his own risk. He must make good any loss so sustained by the principal. Illustrations (Appended To Sec. 211):
(a) A, an agent, engaged in carrying on for B a business, in which it is the custom to invest from time to time at interest, the moneys which may be in hand, omits to make such investments. A must make good to B the interest usually obtained by such investments. (b) B, a broker, in whose business it is not the custom to sell on credit, sells goods of A on credit to C, whose credit at the time was very high. C, before payment, becomes insolvent. B must make good the loss to A, irrespective of his good intentions. 2. Duty to carry out the work with reasonable skill and diligence (Sec.
212):
The agent must conduct the