Obligations of the Agent

Question 1

What are the residual obligations of an agent?

Answer 1

1. To do what they have been instructed to do
2. Exercise care, skill and diligence
3. To impart information
4. To advise
5. To act in good faith
6. To account

Question 2

What happens if the agent does not comply with their obligation to do as instructed?

Answer 2

No remuneration (barring independent agents)

Question 3

Is it possible for the agent to appoint/delegate another agent to fulfill the task?

Answer 3

1. If it is the case that the principal has appointed the agent because the principal wants the benefit of that particular person’s skill and expertise then delectus personae rule applies.
2. In other situations it may be possible to delegate.

Question 4

Which case deals with the delectus personae rule?

Answer 4

Strydom v Roodeval Management Committee.

Question 5

What are the ways in which to delegate?

Answer 5

1. Power may be delegated
2. Substitution
3. An agent be appointed to find another agent.

Question 6

What is the leading case on the obligation to exercise care, skill and diligence?

Answer 6

S v Heller.

Question 7

What does S v Heller hold?

Answer 7

The principal bargains for the exercise of the disinterested skills, diligence and zeal of the agent.

Question 8

What is the obligation to impart information?

Answer 8

If information which is likely to affect the judgment of the principal comes to the knowledge of the agent, the agent is obliged to inform the principal.

Question 9

What is the obligation to advise?

Answer 9

If a principal employs a skilled agent, particularly one who has skills the principal lacks, the agent is bound to advise the principal of the probable consequences of any course of action to be followed.

Question 10

What is the obligation to act in good faith?

Answer 10

Agent must conduct the principal’s affairs in the principal’s interests and not for the agent’s benefit.

Question 11

What is the leading case on the obligation act in good faith?

Answer 11

Robinson v Randfontein Estates Gold Mining Co.

Question 12

What did the court hold in Robinson v Randfontein Estates Gold Mining?

Answer 12

Where one man stands to another in a position of confidence involving a duty to protect the interests of that other, he is not allowed to make a secret profit at the other’s expense or place himself in a position where his interests conflict with his duty. There is only one way by which such transactions can be validated and that is by the free consent of the principal following upon a full disclosure by the agent.

Question 13

What are the circumstances in which the obligation to act in good faith applies?

Answer 13

1. Secret profits
2. Duty and interest conflicting
3. Misuse of confidential information

Question 14

What happens if there are secret profits?

Answer 14

Any profit an agent makes in connection with a transaction negotiated on behalf of the principal or in a transaction which should have been negotiated on behalf of the principal may be claimed by the principal (Robinson v Randfontein)

Question 15

What is the exception to the rule established in Robinson v Randfontein?

Answer 15

Where the principal, with full knowledge of the facts, permits the agent to benefit himself.

Question 16

What is the rule of duty and interests are conflicting?

Answer 16

No agent may place himself in any position where his interest and his duty may conflict (Transvaal Cold Storage v Palmer)

Question 17

What is the rule relating to misuse of confidential information?

Answer 17

An agent cannot exploit anything which belongs to his principal and which the agent possesses merely in a fiduciary capacity (Jones v East Rand Extension).

Question 18

What happens if there is misuse of confidential information?

Answer 18

Principal can terminate the agency relationship and claim transfer of any rights the agent may have acquired in their own name.

Question 19

What is the obligation to account?

Answer 19

Where the business in which the agent is employed admits of it, or requires it, to keep regular accounts of all his transactions on behalf of his principal, not only of his payments and disbursements, but also of his receipts; and to render such accounts to his principal at all reasonable times, without any suppression, concealment or overcharge.

Question 20

What does Strydom v Roodeval hold?

Answer 20

There exceptions to delegation, there can be no delegation where the act to be performed is of a personal nature in that the identity and personal attributes of performer are of material importance to principal.

Question 21

What is the case for care, skill and diligence?

Answer 21

S v Heller

Question 22

What are the cases for to act in good faith?

Answer 22

1. Jones v East Rand Extension
2. Robinson v Randofntein Estates
3. Mallison v Tanner
4. Transvaal Cold Storage v Palmer
5. Hargreaves v Anderson

Question 23

What does the duty to act in good faith entail?

Answer 23

1. Secret profits
2. Duty and interest conflicting
3. Misuse of confidential information