Contract act 211 to 220

  Contract act 

Section 211 .agent 's duty in conducting principal 's business ---as agent is bound to conduct the business of the principal according to the directions given by the principal or in the absence of any such directions according to the customs which prevails in doing business of the same kind at the place where the agent condutcs such business.when the agent acts otherwise .if any loss be sustained he must make it good to his principal and if any profit accrues be must account for it .

Illustrations 

A.A an agent engaged in carrying on for B a business in which it the customs to invest from time to time ,at interest ,the  moneys which may be in hand onits to make such investment .A must make good to B the interest usually obtained by such investment.

b.B a broker in whose business it is not the customs 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 to A

Section 212.skill and diligence required from agent----as agent is bound to contact the business of the agency with as much skill as is generally possessed by persons engaged in similar business unless the principal has notice of this want of skill .the agent is always bound to act with reasonable diligence and to use such skill as he possesses and to make compensation  to his principal in respect of the direct consequence of his own neglect want of skill or misconduct but not in respect of loss or damage which are indirectly or remotely caused by such neglect want of skill or misconduct.

Illustrations 

a.A a merchant in Calcutta has an agent B in London to whom a sum of money is paid on A 's account with orders to remit .B retains the money for a considerable time .A in consequence of not receiving the money ,becomes insolvent is liable for the money and Interest from the day on which it ought to have been paid according to the usual rate and for any further direct loss as e.g. by variation of rate of exchange but not further.

b  .A an agent for the sale of goods having authority to sell on credit sells to B on credit without making the proper and usual enquiries as to the solvency of B .B at the time  of such sale is insolvent.A must make compensation to his principal in respect of any loss thereby sustained 

CA ,an insurance broker employed by B to effect an insurance on a ship omits to see that the usual clauses are interested in consequence of the omission of the clause nothing can be recovered from underwriters .A is bound to make good the loss to B.

D.A a merchant in England directs B his agent  at Bombay who accepts the agency to send him 100 bales of cotton by a certain ship .B having it in his power to send the cotton omits to do so .the ship arrived safely in England .soon after her arrival the price of cotton rises.B is bound to make good to A the profit which he might have made by the 100 bales of cotton at the time the ship arrived but not only any profit he might have made by the subsequent rise .

Section 213 . agent 's accounts

An agent is bound to render proper accounts to his principal on demand 

Section 214 . agent 's duty to communicate with Principale ----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.

Section 215----Right of principal when agent deals on his own account in business of the agency without first obtaining the consent of his principal and acquainting him with all material circumstance which have come to his own knowledge on the subject the principal may repudiated the transaction if the case shows either that any material fact has been dishonestly concealed from him by the agent or that the dealings of agent have been disadvantageous to him

Illustration 

A A directs B to sell A 's estate .B buys the estate for himself in the name of C.A on discovering that B has bought the estate for himself may repudiate the sale.if he can show that B has dishonestly concealed any material fact or that the sale has been disadvantageous to him

b .A directs to B to sell A 's estate.B on looking over the estate before selling it .finds a mine in the estate which is unknown to A .B informs A that he wishes to buy the estate for himself.but conceals the discovery of the mine .A allows B to buy in ignorance of the existence of the mine .A on discovering that B knew of the  mine at the time he bought the estate may either repudiate or adopt the sale at his option.

Section 216

principal 's right to benefit gained by agent dealing on his own account in business of agency -----if an agent without the knowledge of his principal deals in the business of the agency on his own account instead of on account of his principal,the principal is entitled to claim from the agent any benefit which may have resulted to him from the transaction.

Illustrations 

A directs B his agent to buy a certain house for him B tells A it cannot be bought and buys the house for himself.A may on discovering that B has bought the house compel him to sell it to at the price he gave for it 

Section 217

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 advance 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 .

Section 218 .agent 's duty to pay sums received for principal ----

Subject to such deductions the agent is bound to pay to his principal all sums received on his account .

Section 219.when Agent's remuneration becomes due ----in the absence of any special contract payment for the performance of any act is not due to the agent until the completion of such act but an agent may detain money received by him on account of goods sold although the whole of the goods consigned to him for sale may not have been sold or although the sale may not be actually complete