LAW OF AGENCY INTRODUCTION IMPORTANCE OF THE LAW

LAW OF AGENCY INTRODUCTION

IMPORTANCE OF THE LAW OF AGENCY • In commercial relationships, it is impossible for people to do everything for themselves either because of geographical constraint or lack of expertise. • Therefore in order to facilitate commercial transactions, common law allows one man to authorise another to contract for and to bind him in an authorised contract. • This authority could be conferred by agreement, by estoppel, by ratification or by the operation of law. • In a simple agency, there are three stages, the first is when authority is conferred on the agent or deemed to be conferred on him. The second is, when the agent uses the authority to conclude contract with a third party. And the third, when the contract takes effect between the principal and the third party and the agent drops out.

Definition of Agency • Though agency relationships are quite common, yet it has not been easy to formulate a definition that is generally acceptable. This is because agency relationships covers a very wide range of transactions all of which are difficult to bring under one single description. • Bowstead on Agency defined Agency as ‘…the relationship that exist between two persons, one of whom expressly or impliedly consents that the other should represent him or act on his behalf, and the other of whom similarly consents to represent the former or so to act’ • Powell Law of Agency defined an agent as ‘a person who is authorised to act for a principal and has agreed so to act, and who has power to affect the legal relations of his principal with a third party. ’ • Achike, in his book Nigerian Law of Contract defined agency as follows ‘Agency is the relationship which arises when a person called the agent acts on behalf of another called the principal, whereby the latter undertakes to be answerable for the lawful acts the former does within the scope of his authority’.

Characteristics of Agency • From the definitions above certain characteristics are distinctive in an agency relationship. They are as follows: 1. Agency creates two types of relationship; a bi-lateral relationship between the principal and the agent and a tripartite relationship between the principal, the agent and third party. 2. Agency applies only in situations when the agent’s representation or action on behalf of the principal affects the principal’s legal position.

Characteristics of Agency 3. Agency relationship arises only in circumstances where it is considered in law to arise (Osigwe v. PMCL (2009) 1 -2 SC (Pt. 1) 79 at 104). 4. Agency relationship is not always a consensual relationship arising from agreement or consent. 5. The agent is a conduit pipe or link connecting the principal and the third party. 6. Agency creates a fiduciary relationship.

Agency and other Similar Relationships Agency and Trustee • A trust arises when property is vested in a person called the trustee, who is bound to hold and administer that property on behalf of another called the beneficiary, whether the obligation is created expressly or by implication or by operation of law. • The position of an agent is similar to that of a trustee in that they both act on behalf of others and there is a fiduciary relationship between the two parties. • However, they differ in several respect such as: a. The trustee has title to the trust property as the legal owner. The agent has no title whatsoever to his principal’s property.

Agency and other Similar Relationships Agency and Trustee b. The act of the agent is that of the principal but a beneficiary’s act does not in any way bind the trustee who acts in his own name. c. The trustee’s duties are partly regulated by the statute (Trustees Act 1925), while no general statute regulate the duties of an agent. d. A trustee is not subject to the control of the beneficiary and he can only be removed by the court (Renner v. Renner (1961) 1 ALLNLR 233). In an agency, the agent is subject to the control of his principal and only the principal can remove him.

Agency and other Similar Relationships Agency and Directors • A director of a company is an agent of the company (Ferguson v. Wilson (1866) 2 ch. App 77). • However, the function of a director is more than that of an ordinary agent because they represent the directing mind and will of the company and control what it does (Lennard’s Carrying Co. v. Asiatic Petroleum Co Ltd (1915) A. C. 705).

Agency and other Similar Relationships Agency and Bailment • Bailment is the delivery of goods by one person (the bailor) to another person (the bailee) for a certain purpose upon an express or implied promise by the bailee to return them to the bailor or to return them to someone designated by him after the purpose has been fulfilled. • The similarity between agency and bailment is that both may have control over the principal’s property. • Agency differs from bailment in that a bailment does not give the bailee a right to sell the bailor’s property or the right to alter the bailor’s legal position in the way an agent can. • Also a bailee does not represent a bailor in the way that an agent represents a principal.

Agency and other Similar Relationships Agency and Employee • An employee is a person employed by another to work for him on terms that he, the employee is to be subject to the control and directions of his employer in respect of the manner in which his work is to be done (Hewitt v. Bonvin (1940) 1 KB 188, 191). • A person may be both an agent and a servant where he is employed to make contracts on behalf of the employer or dispose of the property of the employer (e. g. a sales representative). • Both an employee and an agent owe the employer or principal a duty of good faith.

Agency and other Similar Relationships Agency and Employee • However, an employee differs from an agent in the following ways: a. A servant cannot serve two masters but an agent can act for many principals. b. In agency, the principal is not concerned with the way the agent carries out his work. A servant is however under the direct control and supervision of his master (Schankel v. A. O. Nigeria Ltd & Anor (1967) 2 ALR Comm 167)

Types of Agency • An Agent could fall either into two broad categories, which are; general or special Agency. • A general Agent has broad or general authority to represent his principal in a particular matter in the ordinary course of his business, trade or profession. • However, a Special Agent’s authority does not arise in the ordinary course of his business, trade or profession. Rather he is authorized to act outside the normal scope of his business, trade or profession. Hence, his authority is limited to a particular transaction or event

Types of Agency • There also different kinds of professional agents such as; a. Mercantile agent b. Factor c. Brokerage d. Del Crederel e. Auctioneer f. Clearing and Forwarding Agent g. Partners h. Attorney

Types of Agency Mercantile agent • A mercantile agent is a person having in the customary course of his business as agent, authority to sell goods or consign them for purposes of sale or to buy goods or raise money on the security of the goods (section 1 Factors Act). • A mercantile agent has the implied authority to pledge the goods entrusted to him (Weiner v. Gill (1906) 2 KB 574). • He can pass ownership to a third party even if he has no clear and express authority to do so unless he expressly forbade it and third party was aware of the prohibition (section 2 (1) Factor Act).

Types of Agency Factor • A factor is also a mercantile agent, therefore in the ordinary course of his business, he has authority to sell goods or to consign goods for the purpose of sale (section 1 Factor Act). • However, though a factor is a mercantile agent yet he can not pledge the goods of his principal. This is because a factor is an agent entrusted with the possession and control of the goods to be sold by him for his principal (Kayaoja v. Olabode (1968) NCLR 83). • He may sell in his own name goods entrusted to him for sale and receive the purchase price. • He has a general lien on all goods that fall into his possession as a factor and on the purchase price of such goods for the amount due to him from his principal.

Types of Agency Brokerage • A broker is a person employed to negotiate contracts on behalf of another for the sale or purchase of property or goods for a commission called brokerage. • He is a link between two parties to a contract. He is merely a negotiator between the parties and is essentially a middle man whose business is to bring the parties into a contract together by negotiations. • Unlike a factor, he has no possession of the goods he sells and has no lien on them. He may not sell in his own name and can only sue in his principal’s name (Fowler v. Hollins (1872) LR 7 QB 616, 623). • Examples of brokers include insurance broker, stockbroker and shipbroker.

Types of Agency Del Crederel • These are mercantile agents who guarantee to their principals that third parties dealing with them shall duly pay money due under their contract. • For guaranteeing the third parties the del credere agent is entitled to an extra remuneration called the del credere commission (Ijieboi v. Ekpokhai (1970) NCLR 86; Onioregie v. BPCF (1962) 1 All NLR 156). • The del credere agent warrants the solvency of those he introduces to his principal. • Today, this type of agent is confined to a very few special branches of business and they are no longer common.

Types of Agency Auctioneer • An auctioneer is an agent who is appointed by a seller to sell goods by public auction, for a reward, generally in the form of a commission. • He is first an agent of the seller and his authority can be revoked at any time before a sale takes place, unless the rights of third parties have intervened. • He is also the agent of the buyer for the purpose of signing the memorandum required by the law of property unless he himself is the vendor (Farebrother v. Simmons (1822) 5 B & Ald 333). • The auctioneer has the following duties: a. to obey his principal’s instructions; b. to perform the assignment himself, and not to delegate them to another unless he has the authority of his principal to do so; c. to protect the goods and property entrusted to him;

Types of Agency Auctioneer d. to use all efforts to obtain the highest price possible for the goods or property to be sold. e. to collect the purchase money in cash for the goods sold by him before they are passed to the purchaser unless it is customary to collect cheques. • A sale by auction is complete on the fall of the auctioneer’s hammer to the highest bidder except where the sale is subject to a condition subsequent like approval of the sale. • An auctioneer has the authority to sell without a reserved price. But where the seller subjects the sale to a reserve price, the auctioneer can not sell below that price.

Types of Agency Clearing and Forwarding Agent • A clearing agent is a person employed by the principal to clear goods from the port while a forwarding agent is one who carries on business of arranging for the carriage of goods for other people. • The forwarding agent is not a carrier and does not obtain physical possession of the goods but ensures that the goods are carried and forwarded to the principal. • A clearing and forwarding agent has a lien on the principal’s goods (Vivian Younger & Bond Ltd v. Osman Tayed & Bros (1960) 5 FSC 280, 283).

Types of Agency Partner • Each Member of a Partnership is, as a rule, an agent of the other partners to the partnership.

Types of Agency Attorney • An attorney simply means an agent or representative. • When an attorney is appointed in writing under seal, he is said to have ‘power of attorney. • A legal practitioner appointed to act for another in legal matters is also referred to as an attorney in law. • An attorney at law cannot commence proceedings on behalf of the principal without definite instructions to do so. • However, once an attorney at law has been instructed he has implied authority to take every step to enforce or defend the legal interest of his client. He can compromise an action unless expressly forbidden (Neale v. Lady Gordon Lennox (1902) A. C. 465).

Types of Agency Attorney • He can receive money on behalf of his client and cannot be made personally liable to repay to the third party money so received and paid to his client (Olatunde Laja v. Ogunsiji (1975) 12 CCHJ 1921) • While acting as a legal practitioner the attorney at law can be liable in negligence. Any contract with his client relieving him of such liability is void (s. 9 Legal Practitioners Act, 1975 Cap. L. II 2004 LFN). • However, where he acted gratuitously or his negligence arises from the conduct of his client’s case in court or tribunal, he would not be liable in negligence (s. 9 Legal Practitioners Act. See also Rondel v. Worsley (1967) 1 QB 443).

Creation of Agency • An agency relationship could be created in several ways and they are as follows: 1. By Agreement: Which could be further broken down into: a. actual authority. b. Implied authority c. Usual authority 2. Estoppel 3. Ratification 4. Necessity 5. Cohabitation.

Creation of Agency Capacity to Appoint 1. Capacity to appoint an Agent • The general rule is that, whatever a person has power to do himself, he may appoint an agent to do it for him. However, he cannot appoint an agent to do what he cannot legally do. • Therefore a principal must have the capacity to do what he is authorising his agent to do on his behalf (Bevan v. Webb (1901) 2 Ch 59, 77 -78. See also Reshephard (1953) Ch 728). However there are two exceptions to this rule: a. Where the act is required by a statute to be done by the person himself. b. Where the competence to do the act arises by virtue of holding some public office.

Creation of Agency Capacity to Appoint • In line with the general rule, an infant can only appoint an agent for matters to which he can lawfully enter into contract himself such as necessaries (Doyle v. White City Stadium Ltd (1935) 1 K. B. 110). • With regards to an insane person, the rule is that an agent may act on behalf of an insane principal so as to bind such a principal unless the third party to the transaction was aware of the insanity of the principal (Drew v. Nunn (1879) 4 QBD 664 at 668. See also Imperial Loan co. Ltd v. Stone (1892) 1 QD 599). • A Corporation cannot appoint an agent to do an ultra-vires act (Re Jon Beauforte (1933) Ch. 131). • An unincorporated association cannot appoint an agent, since it is not a legal entity.

Creation of Agency Capacity to Appoint 2. Capacity to be appointed as an agent • The rule here is different and is that all persons of sound mind, infants and other persons with limited or no capacity to contract on their own behalf, are competent to act or contract as agent. • The rationale for this rule is that, the agent is a mere conduit pipe and it is the principal who bears the risk of inadequate representation. • Therefore a company can even act as an agent in respect of transactions that would ordinarily be ultra vires its own memorandum and articles of association.

Creation of Agency Form • No formality such as writing or deed is required for the valid appointment of an agent. • An oral appointment is even effective in law. • There are however exceptions to this general rule. The exceptions are as follows: i. At common law, an agent appointed to execute a deed on behalf of the principal must himself be appointed by deed. Such deed is called a power of attorney (Abina v. Farhat 14 NLR 17).

Creation of Agency Form ii. Under section 78 of the Property and Conveyancing Law applicable in old Western Region of Nigeria, an agent can not create or dispose of an interest in land, or dispose of an equitable interest or trust on behalf of a principal unless he himself has been appointed in writing. iii. Under the Companies and Allied Matters Act, where a principal appoints agent to sign on his behalf ‘a consent to act’ as director, the appointment must be made in writing.

Creation of Agency by Agreement • Agency created by agreement may confer actual, implied and/or usual authority on an agent to act on behalf of his principal. 1. Actual Authority • An agent is said to have actual authority when he is given actual express authority to act for a principal and the principal has agreed in advance that the agent should have such authority. • The authority may be expressed in writing or by word of mouth (Rosenje v. Bakare (1973) 5 SC 131, 139 -140). • The power of the agent is confined to those which are expressly conferred on him by the appointment (Odunfanade v. Rossek (1960) F. S. C. 358). • It is not necessary for the document appointing the agent to describe the relationship as principal and agent, the law will construe the agreement as giving rise to an agency relationship if that is the legal essence of what has in fact been agreed.

Creation of Agency by Agreement 2. Implied authority • Implied authority arises where the agent has the implied authority to do what he was commissioned to do (Ryan. Pilkington (1959) 1 W. LR. 403. A. C. B. Ltd v. Balogun & Ors (1969) NCLR 176 at 182). • It is the authority to do all things necessary in order to achieve the goals expressly agreed with the principal. • It is that authority that permits the agent to perform all that is subordinate or incidental to the object for which he was appointed. • Implied authority amplifies actual or express authority and is limited to acts which are incidental and necessary for the exercise of the actual authority. • Secondly, an agreement to create an agency may also be implied from the conduct of the parties (Biggar v. Rocklife Insurance Co (1902) 1 KB 516).

Creation of Agency by Agreement 3. Usual Authority • Usual authority is a variety of implied authority in that it forms part of an agent’s authority regardless of what he is expressly authorised to do. • It is the authority usually centred upon or normal to agents by virtue of their custom, trade, business or profession (Oyenuga v. International Computers Nig. Ltd (1991) 1 NWLR (Pt. 168) 415). • Professional agents have authority to perform acts which are usual in their profession (Papilon v. Brunton (1860) 5 H & N 518. Gordon v. Serico Ltd (1986) 1 EGLR 71. Okesuji v. Lawal (1991) 2 SC 25) • Usual authority maybe authority derived from custom or conduct over a long period of time granted to agents of such nature. • Where usual authority is derived from custom such customs must not be unreasonable or illegal otherwise it cannot bind the principal (Blackburn v. Mason (1893) 68 LT 510.

Creation of Agency by Estoppel • Estoppel arises when a person is barred from refuting the existence of a fact which they have implied, either by action or by their failure to act. • Agency by estoppel will render a person liable to a third party where he allows another to represent himself as having his authority to deal with the third party or holds him out as his agent (Trenco (Nig) Ltd v. Africa Real Estate & Inv. Co Ltd (1978) 4 SC 9 at 26. Reccah v. Standard Co. of Nigeria Ltd (1922) 4 N. L. R. 48). • It is immaterial that the agent has no authority or acted in excess of his actual authority (Ogunsusi v. Lukan (1968) 2 ALR. Comm. 215). • .

Creation of Agency by Estoppel • Agency by estoppel is also referred to as agent with ‘apparent’ or ‘ostensible’ authority’. The term ‘ostensible’ refers to something that appears to be a particular way, even if it is not that way in reality. • Agency by estoppel arises only where there is (a) a representation (b) a reliance upon the representation by the third party and (c) material alteration of his position resulting from the representation to his detriment (Rama Corp Ltd v. Proved Tin & General Investment Ltd (1952) 2 QB 147, 149 -150). • See the Cases of Oyenuga v. International Computers (Nig) Ltd (1991) 1 SC (Pt. 2) 56. Freeman and Lockyer v. Buckhurst Park Properties (Mangal) Ltd (1964) 2 QB 480

Creation of Agency by Estoppel • Agency by estoppel arises only where there is (a) a representation (b) a reliance upon the representation by the third party and (c) material alteration of his position resulting from the representation to his detriment (Rama Corp Ltd v. Proved Tin & General Investment Ltd (1952) 2 QB 147, 149 -150). • See the Cases of Oyenuga v. International Computers (Nig) Ltd (1991) 1 SC (Pt. 2) 56. Freeman and Lockyer v. Buckhurst Park Properties (Mangal) Ltd (1964) 2 QB 480.

Creation of Agency by Ratification • To ratify means to authorise or approve something that has already been done, to perfect an otherwise imperfect act. • When an agency is by ratification, it means that the principal approves or authorises the act of agent after the act has already been done. In this case, the agent does the act without authority of the principal, which means that, at the time the act is done, there is no existing agency relationship or no authority for that particular act. • There are two circumstances under which the principal can ratify an already concluded act of the agent: a. Where there was no agency relationship in the first place; b. where there is an agency relationship, but the agent exceeded the stated authority.

Creation of Agency by Ratification • There are six conditions which must be fulfilled before an agent’s act could be ratified: a. The Principal must be in existence at the time the agent purported to act for the principal: see the cases of Kelner v. Baxter (1866) L. R. 2 CP 174; Dario Caligara v. Giovani Sartori & Co Ltd (1961) 1 All N. L. R. 534. However, section 72 of the Companies and Allied Matters Act has altered this rule in relations to companies. .

Creation of Agency by Ratification b. Principal must be Ascertainable: see the cases of Watson v. Swann (1862) 11 C. B. N. S. 756 at 773; Keighley, Maxsted & Co v. Durant (1901) 1 A. C. 240. c. Principal must be Capable: See the cases of Firth v. Staines (1897) 2 Q. B. 70 at 75; Boston Deep Sea Fishing & Ice Co. v. Farnham (1957) 3 All E. R. 204; Ashbury Rly Carriage & Iron Co v. Riche (1875) L. R. H. L 653

Creation of Agency by Ratification d. The act must be Ratifiable: See Brook v. Hook (1871) L. R. 6 Exch. 89. Acts which are ultra vires the principal is void; but an act which is ultra vires the agent is voidable and can be ratified (Matalimpex v. A. G. Levents & Co (Nig) Ltd (1976) 2 S. C. 91 at 108. e. Knowledge of the facts: The Principal must be aware of the full facts of the acts before he can ratify (Lewis v. Read (1845) 13 M & W 834; Mutual Aid Society Ltd v. Akerele (1966) N. M. L. R 257)

Creation of Agency by Ratification f. Proper time: Folashade v. Durosola (1961) 1 All N. L. R. 87 at 91. Effect of Ratification • Ratification is not authority but it has the effect of authority because it has retrospective effect (Bolton Partners v. Lambert (1889) 41 Ch. D. 295). • If the offer is made conditional such as where it is subject to the principal’s ratification it can be withdrawn before it is ratified (Watson v. Davies (1931) 1 Ch. 455).

Creation of Agency by Necessity • Necessity arises when something must be done out of urgency, to make up for a difficulty or impossibility. • Agency by necessity has to do with circumstances where it becomes particularly difficult or impossible for a person to act by him/herself, and consequently, another must act on his/her behalf. • There are two traditional instances under which agency by necessity may arise: a. A shipmaster has wide powers in the case of emergency to pledge the credit of the owner or chatter and, he can also, if need be, sell the cargo to protect the interest of the consignees. b. A person is not liable on a bill of exchange who may accept it for the honour of drawer.

Creation of Agency by Necessity • There are three requirements that must be satisfied for the application of agency by necessity: a. There must be an emergency making the agent’s act commercially necessary: See the cases of Prager v. 605. Blatstpiel Stamp & Heacock Ltd (1924) 1 KB 566; Phelps, James & Co v. Hill (1891) 1 Q. B. b. It must be impossible to communicate with the principal in time: See the cases of Springer v. G. W. R. (1921) 1 KB 257. c. The act must be done bona fide in the interest of the principal and not merely for the benefit or convenience of the agent. See the case of Munro v. Wilmot (1949) 1 K. B. 295. • It must be noted that a wife who has been deserted by her husband becomes an agent of necessity to pledge his credit for necessaries (See Eastland v. Burchell (1878) 3 QBD 432 at 435 -436; Hutchinson v. Omowunmi Olajide (1970) N. N. L. R. 31).

Creation of Agency by Cohabitation • Where a man and a woman live together as husband wife or man and mistress and maintain a household establishment, there is a presumption that the wife or mistress has authority to pledge the husband or man’s credit for necessaries ( see Phillipson v. Hayter (1870) LR 6 CP 38 at 42; Ryans v. Sams (1848) 12 Q. B. 460). • The term ‘necessaries’ could be defined as goods that are really necessary and required by the woman for her use having regard to her station in life. These will include items of foods, clothing and household utensils.

Creation of Agency by Cohabitation • The right to pledge the husband’s or man’s credit is founded on a rebuttable presumption and it is rebutted by proving any of the followinga. That the wife or mistress is adequately supplied with necessaries. b. She has enough allowance for the purchase of necessaries. c. The husband has expressly warned the tradesman not supply goods to his wife or mistress on credit. d. The goods were supplied exclusively on the credit of the wife and not that of the husband (Debenham v. Mellon (1880) 6 A. C. 24; Prager v. Blatspiel Stamp and Heacock Ltd (1924) 1 KB 566).

Duties of an Agent The duties of an agent are: • • • Duty to Perform the undertaking Duty to obey Duty to Act with Care and Skill Duty not to sub-delegate Duty of good faith Duty to account

Duties of an Agent Duty to Perform the undertaking • Unless the agent is acting gratuitously for the principal, he is bound to perform all duties assigned to him by the principal under the agency (Fraser v. Furman Ltd (1967) 1 W. L. R. 898; Balfe v. West (1853) 13 C. B. 466). • The agent’s duty to perform is limited to performing only lawful instructions. He is not obliged to carry out illegal duty (Cohen v. Kittel (1889) 22 QBD 680).

Duties of an Agent Duty to obey • The agent in performing his duties is bound to obey the principal’s instructions and authority. • He can only refuse to obey the principal’s instruction which will lead them to do an illegal act. • He can not deviate from a positive instruction of the principal even if he reasonably believes that doing so might be beneficial to the principal (Esso West Africa Inc. v. Alli (1968) ALR. Comm. 317 at 330; Bertram v. Godfrey (1830) 1 KB 381). • Whether the agent has obeyed the principal’s instruction will depend on the interpretation of his authority.

Duties of an Agent Duty to obey • An agent who disregards a specific prohibition by his principal will be liable for any loss caused thereby (Ferrers v. Robins (1835) 4 LJ Ex 178; Pape v. Westacott (1894) 1 QB 272) • Where the instructions given are ambiguous the agent is to act honestly and reasonably. Where he is not sure, he can seek further clarifications. • Failure to obey the principal’s instruction will render the agent liable to the principal in damages for breach of contract.

Duties of an Agent Duty to Act with Care and Skill • It is not enough that an agent obeys his principal’s instructions, an agent must also exercise reasonable care and skill when acting on the principal’s behalf. • All agents owe a duty of care and skill to their principals whether they are acting for a remuneration or acting gratuitously. • Where the agent belongs to a profession the care and skill which is expected of him is one which is usual and reasonably necessary to be used by members of his profession to carry out a duty as the one assigned to the agent. • Where the agent does not belong to a profession the care and skill required of him is that which is usual, customary, reasonable and necessary to be used in carrying out such a duty (Pringle of Scotland Ltd v. Continental Express Ltd (1962) 2 Lloyds Rep. 80; Hill v. Harris (1965) 2 All ER 358).

Duties of an Agent Duty to Act with Care and Skill • A principal who knows the agents skill is not entitled to expect a higher degree of care than a man in his position is expected to possess (Omorayo v. Ojukutu (1961) 1 All. N. L. R. 901). • An agent who falls below the standard of care and skill required of someone in his position will be liable for negligence under the law of tort and simultaneously for breach of contract of agency (Esso Petroleum Co. Ltd v. Mardon (1976) QB 801; Arenson v. Arenson (1977) AC 405; Midland Bank Trust Co. Ltd v. Hett, Stubbs & Kemp (1979) Ch. 384). • A gratuitous agent need not perform the agency, but if he does, he must exercise the skill that he possesses (Chaudry v. Prabhakar (1988) 3 ALLER 718; Wilson v. Brett (1843) 12 LJ Ex 264).

Duties of an Agent Duty not to sub-delegate • The general rule is that an agent is expected to act personally and not to delegate his duties and powers (John Mc. Cann & Co v. Pow (1975) 1 All. ER 129; De Bussche v. Alt (1878) 8 Ch. D 286) • There exceptions to this rule, they are: i. where custom sanctions delegation; ii. Where delegation is necessary for proper performance; iii. Where the task to be performed is purely ministerial and requires no special skill (Allam & Co Ltd. v. Europa Poster Services Ltd (1971) AC 793);

Duties of an Agent Duty not to sub-delegate iv. Where there is an agreement, express or implied, to allow it. v. Where no confidence is reposed in the agent’s personal skill (John Mc. Cann & Co v. Pow (1975) 1 All. ER 129). • Delegation does not create privy of contract between the principal and the sub-agent to whom authority had been delegated. • Rights and liabilities inherent in a contract will not exist between the principal and sub -agent (see Schmaling v. Tomlison (1815) 6 Taunt, 147; Call Printers Ass v. Barclays Bank (1931) 145 L. T. 51). • If an agent delegates his duties in circumstances falling outside the exceptions, he and not the principal is liable to the sub-agent, since the sub-agent is an agent of the agent.

Duties of an Agent Duty of good faith • This duty requires the agent to act in the interest of his principal. • He must not allow his personal interest conflict with the obligations he owes to his principal. • The agent must not therefore place himself where his personal interest may conflict with his duty to the principal (Aberdeen Railway v. Blaikie Bros (1854) 1 Macq. 461, 471; Armstrong v. Jackson (1917) 2 KB 822). • Therefore an agent cannot ordinarily act for both parties in a transaction (Harrods Ltd v. Lemon (1931) 2 KB 157). • An agent employed to sell or let out can not sell or let to himself (Mc. Pherson v. Watt (1877) 3 App Cas 254).

Duties of an Agent Duty of good faith • It is a cardinal principle of agency that an agent must not take bribe or make secret profit out of his agency (Anangel Atlas Compania Naviera SA v. Ishikawajima- Harima Heavy Industries Co. Ltd (1990) 1 Lloyds Rep. 167, 171; Palmer of Nig. Ltd v. Fonseca (1946) 18 NLR 49, Andrews v Ramsay & Co (1903) 2 KB 635). • Where the agent makes a secret profit or takes a bribe, the contract is voidable at the option of the principal. • While an agent who makes secret profit can still regain his commission though he must return the secret profit to the principal. However, he cannot receive commission if he has received bribe.

Duties of an Agent Duty of good faith • The fact that the agent is not being paid a commission does not entitle the agent to secret profit from his position (Turnbull v. Garden (1869) 20 L. T. 218) • Where an agent has received bribe, the law presumes that: a. The third party has acted corruptly; b. The agent has been influenced by the bribe to the detriment of the principal. c. The principal has suffered damage to the amount of the bribe. • Where an agent has received a bribe, the principal could repudiate the contract or affirm it and sue for the recovery of the bribe (Palmer Nig. Ltd v. Fonseca (1946) 18 N. L. R. 49). In addition the principal can sue the agent and the third party who had been jointly and severally liable for conspiracy to commit fraud. The principal may also sue for deceit. In all cases of breach of duty, an agent is liable to instant dismissal like an employee (Maja v. Coco (1968) 1 All. NLR 141 at 151).

Duties of an Agent Duty to Account • An agent is required to keep and render proper and accurate accounts for all transactions he had entered on behalf of his principal. • The agent must be prepared and willing to render an account if and when requested to do so by the principal. • He must ensure that his personal account is kept separate from agency account (Gray v. Haig (1855) 20 Beav. 219). If he fails to do so and his failure to render account is as a result of this, the law will presume that everything in his account belongs to the principal especially if the amount therein is equal to or less than the amount owed to the principal (Cook v. Adison (1869) L. R. 7 Eq 466). • An agent who fails to keep proper account, or fails to pay to his principal monies or transfer property held on his principal’s behalf is liable to his principal in an action for account where the amount is ascertainable or for money had and received where it is not (Godwin v. CAC (1998) 12 SC 1).

RIGHTS OF AN AGENT Right to Remuneration • This is the most important duty a principal owes to his agent, for the agent is to be rewarded for services rendered, unless he is acting in a purely gratuitous manner. • A principal is not bound to pay his agent unless there is an express or implied agreement to that effect; or, the agent, in light of services rendered, is liable to claim from the principal on a quantum meruit basis (Kayaoja v. Olabode (1968) NCLR 83; Way v. Latilia (1937) All ER 759).

RIGHTS OF AN AGENT Right to Remuneration • Where there is an express provision for remuneration, such a term should be clear and unambiguous (Taylor v. Brewer (1813) 1 M & S 290; Bryant v. Flight (1839) 5 M & W 114). • Where there is no express provision as to the agent’s remuneration, he may still be entitled. Implied remuneration will usually be introduced into an agency after a reasonable consideration of all the circumstances and other terms of the agency from which a presumption of intention to remunerate the agent can be drawn. • Where the agent has performed the agreed task, the principal is not allowed to escape payment by going behind the back of the agent to conclude the transaction (Burchell v. Gowrie & Blockhouse Collieries Ltd (1910) AC 614).

RIGHTS OF AN AGENT Right to Remuneration • Where the agent belongs to a profession and the agreement does not state any sum as remuneration, the agent is to be paid in accordance with the scale of charges set by members of the profession (Badawi v. Elder Dempster Agencies Ltd (1968) NCLR 394). • Where there is no fixed amount of remuneration or custom relating to payments exists, and the agency is not gratuitous, the court may order the principal to pay the agent a reasonable amount on a quantum meruit basis (Byrant v. Flight (1839) 5 M and W 114). • The agent is only entitled to remuneration for concluded transactions, unless where expressly stated. Where the agent performs a task on behalf of the principal, and the relevant transaction is not brought to fruition, the agent is not entitled to remuneration (Luxor (Eastbourne) Ltd v. Cooper (1914) AC 108). • Therefore remuneration is earned when the agent is the direct, immediate and effective cause of the event upon the occurrence of which the principal has agreed to pay the agent remuneration (Toulin v. Millar (1887) 58 L. T. 96; Erabor v. Incar (1973) NCLR 73). • Where the remuneration of the agency is depends on profits, it is unquestionably clear that the absence of profit would deny the agent of the right to commission (Luther v. Mandilas and Karaberis Ltd (1958) 3 F. S. C. 98)

Right of Indemnity • To indemnify means to compensate someone for some loss that they have suffered. • Indemnity covers the expenses or liabilities incurred by the agent in the course of doing his/her job as an agent. • An agent is entitled to be indemnified by the principal in respect of all liabilities and expenses properly and legitimately incurred by him in the execution of his duty (Thacker v. Hardy (1878) 4 Q. B. D. 685; Hickens v. Jackson (1943) A. C. 266). • This right covers only expenses and liabilities incurred by an agent when acting within the scope of his authority (Lewis v. Samuel (1846) 8 Q. B. 685; Coker v. Wickliffe (1944) 17 N. L. R 110). • Indemnity can not be claimed for illegal act unless the agent was unaware of the illegality or was misled by the principal as to the nature of the transaction (Adamson v. Jarvis (1827) 4 Bing. 66). • An agent can enforce his right of indemnity by action or by exercising his right of lien.

Right of Lien • At common law a person has a right to retain possession of the goods of another without consent, as security for payment of a debt owed him. • This is available to an agent in respect of the principal’s goods in his possession until his claims are met. • It is only a possessory lien which confers no right to sell.

Right of Lien • Possessory lien is either particular or general. • It is particular when it relates to services rendered in connection with the goods and general when it is in respect of any pecuniary entitlement of the agent. • The law frowns at general lien unless it is expressly accorded by agreement or usage (Witt & Bush Ltd v. Alraine (Nig) Ltd (1968) 1 ALR. Comm. 243).

Right of Lien • By trade usage agents like factors, bankers and brokers have a general lien. • To be able to exercise a lien the goods must be in the lawful possession, actual or constructive, of the agent as agent (Dixon v. Stansfield (1850) 10 C. B. 398). • The agent is entitled to retain his lien until his claim has been satisfied (S. C. O. A. v. Amusa Raji (1961) 5 E. N. L. R. 85).