ACCA Applied Skills · Corporate and Business Law (Global) · Agency law
Marek is an agent for Brightway Ltd and has authority to negotiate sales. Without telling Brightway, he also acts as agent for a competitor, Corvin Ltd, in selling the same products to the same customer, and takes commission from both. Brightway later learns of this. Which statement is most accurate?
Marek has breached his fiduciary duty to avoid a conflict of interest by acting for a competitor without Brightway's informed consent. Brightway can terminate the agency and recover the commissions without proving loss, and telling the customer does not cure the breach.
- AThere is no breach, because Marek disclosed the commissions to the customer
- BMarek has breached his duty to avoid a conflict of interest, and Brightway may recover the commission and terminate the agencyCorrect
- CMarek has breached his duty only if Brightway proves it lost sales as a result
Explanation
An agent must avoid conflicts between his duty to one principal and his duty or interest elsewhere, unless both principals give informed consent. Disclosure to the customer is irrelevant, as Brightway did not consent. The principal may recover the secret commission and terminate the agency, and proof of loss is not needed.
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