( a ) Merry was instructed by Datuk Y to sell a house in Penang. She was promised a remuneration of RM3000. While performing her duties, Merry has used her own money amounting to RM900. Merry received RM5000 as deposit from the buyer of the house. After completion of the transaction Datuk Y refused to make any payment to Merry. Advise the parties. (35 Marks) ( b ) Agency can be terminated by operation of law. Discuss . ( 15 Marks ) QUESTION 2 ( a ) Khairul has appointed Kamarul as his agent to sell his shop house at Jalan Suka Ria.
According to the agency agreement, the shop house should be sold at price of RM150, 000 within a period of one year. 8 months after the appointment, Kamarul suffered a heart attack. He is not able to perform his duty as his agent due to health problem. Kamarul wishes to discontinue to an agent. Advise Kamarul (35 Marks) ( b ) Agent owes duty of good faith towards his principal. Discuss. (15 Marks) QUESTION 3 ( a ) Zaza appointed Ah Long as her agent to purchase a computer software for RM 15,000.
Ah Long exceeded his authority by purchasing the software at a higher price of RM20, 000. Advise Zaza. (35 Marks) ( b ) Discuss the maxim of Delegatus Non Potes Delegare. (15 Marks) End of question examination Answer Scheme QUESTION 1 (a) ? Issue – whether Datuk Y has breach duty of Principal by not paying salary of Mery – whether Mery is entitled to the remuneration ? Law – introduction (definition of agency, agent and principal) – duties of principal towards his agent.
– to pay the commission / agreed remuneration + ANDREWS v RAMSAY – not to prevent or hinder the agent from earning his commission – to indemnify & reimburse the agent for lawful acts done in the exercise of his duties + HICHENS v JACKSON – the agent has incurred losses / liabilities while perform his duties + KYALL v LIM KIM KEAT – duty of agent to pay his principal all sum received on his behalf + section 170 and section 171 ? Application – Datuk Y has breach duty of principal when he refused to pay the salary to Mery and Mery is entitle to have her salary.
– Authority : Sect 170 & Sect 171 of CA 1950 – Case : Andrew + Ramsay ? Conclusion QUESTION 1 (b) Agency may be terminated by operation of law. ? Introduction – introduction (definition of agency, agent and principal) ? Law – agent may be terminated by party of the contract and by operation of law – by operation of law; i- by performance of the contract – Sect 154 of CA 1950 ii- by expiration of the term of the period iii- by the death of either Principal or agent – sect 154 of CA 1950 iv- by subsequent insanity of either Principal or agent – sect 154 of CA 1950.
v- by bankruptcy/insolvency of the Principal vi- by happening of an event which render the contract become void. ? Conclusion QUESTION 2 (a) ? Issue – whether kamarul can discontinue his duties as an agent before his term expired ? Law – introduction (definition of agency, agent and principal) – State 2 manner in which agency may be terminated / by the act of the parties / by operation of law – By the act of the parties can further be divided into : i- By mutual consent/ By unilateral revocation by the principal ii-By unilateral renunciation by the agent – S.
154 – S. 160 – S. 159 – S. 158 ? Application – Kamarul incapable to continue the contract. ? He may renounce himself provided that he did not yet start the contract. He must give notice to the Principal. – Sect 154 of CA 1950 – Case Ramsay + Andrew ? ? Conclusion QUESTION 2 (b) Agent owes duty of good faith towards his principal. ? Introduction – introduction (definition of agency, agent and principal) ? Law – agent have several duties towards his Principal a) Obey the Principal’s instruction.
b) No instruction( must act according to the custom c) The agent must exercise care & diligence, use all skills he posses in carrying out his work d) To render proper account when required e) To communicate with the Principal during emergency f) Must act in good faith and no conflict of interest g) All monies & profits should be put into Principal’s account h) Cannot make any secret profit i) Agent must pay Principal all sums received on his behalf j) Agent cannot delegate his authority to other person ( SUB AGENT – good faith = act solely for the benefit of his Principal and not for himself – situation;
i- Agent cannot become a party to the transaction with the Principal Amstrong vs Jackson – If Principal notice that there is no 3rd party, Principal may repudiate the contract – Sect 168 of CA 1950 + Wong Mun Wai vs Wong Tham Fatt ii- Agent cannot act on behalf of 2 Principals at one time without their consent – Fulwood vs Hurley iii- Agent must disclose everything that he knows to the Principal relating to all material fats of the contract ? Conclusion QUESTION 3 (a) ? Issue: whether contract of agency by ratification is formed? ? Law:
o Definition of agency + principal + agent o 5 modes of creation o Definition of ratification + s. 149 o 2 situations & effect o 9 conditions + cases ? Application ? Apply the all conditions & agent by ratification ? If the principal wishes to accept & ratify or principal may choose to reject ? Conclusion QUESTION 3 (b) Discuss the maxim of Delegatus Non Potes Delegare. ? Introduction – introduction (definition of agency, agent and principal) ? Law – Agent cannot delegate his authority to other person ( SUB AGENT Section 143 of CA 1950 3.
– Delegatus non potest delegare = Agent cannot employ another person to do his duty. He must perform the duty by himself -exception; (agent may delegate.. ) 1 . Principal himself approves the delegation De Bussche Vs Alt 2. Ordinary custom of the business that the agent would have power to delegate his authority to other person to perform the duty 3. In the case of emergency/necessity Sect 143 of CA 1950 4. Purely ministerial/clerical work which does not involve discretion or professional skill of the agent John McCann & Co vs Pow ? Conclusion.