ACCA Applied Skills · Corporate and Business Law (Global) · Agency law
Nadia appoints Omar as her agent to sell her car. Omar sells the car and receives a payment of 8,000 from the buyer. Which of the following is a fiduciary duty that Omar owes to Nadia in respect of this transaction?
Omar must account to Nadia for the 8,000 received and may not keep any secret profit. This is a fiduciary duty arising from the agency relationship. Duties to insure or to achieve an above-market price are not imposed on an agent by law.
- ATo account to Nadia for the 8,000 received, and not to keep any secret profitCorrect
- BTo insure the car against damage until the sale
- CTo obtain a price above the market value of the car
Explanation
An agent must account to the principal for money and benefits received in the course of the agency, and must not make a secret profit. There is no general duty to insure the principal's goods, and the agent need only use reasonable skill and care, not guarantee an above-market price.
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