ACCA Applied Skills · Corporate and Business Law (Global) · Agency law
Priya employs Samir as her agent to sell goods and promises him 5% commission on sales. Samir negotiates a sale to a customer, but before the contract is concluded Priya, without good reason, sells directly to that customer on the same terms and so denies Samir the chance to complete the deal. Which statement is correct?
Samir can claim his commission or damages. A principal has a duty not to prevent the agent from earning agreed remuneration, and Priya's direct sale to the customer that Samir had found frustrated his chance of completing the transaction.
- ASamir has no claim because Priya, as principal, may always deal directly with the customer
- BSamir can claim his commission or damages, because Priya prevented him from earning itCorrect
- CSamir can claim commission only if the agency agreement is in writing
Explanation
A principal must not prevent the agent from earning commission that he would otherwise have earned. Priya's wrongful interference is a breach of her duty to the agent, so Samir may claim his commission or damages. Writing is not generally required for this right.
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