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ACCA Applied Skills · Corporate and Business Law (Global) · Agency law

Sunita, an agent, is engaged by Harbour Ltd to sell its goods for an agreed commission. Harbour Ltd's directors, after Sunita has found a buyer and the sale is concluded through her efforts, refuse to pay the commission although the contract of agency entitled her to it. Which right of an agent does Sunita primarily rely on?

Sunita relies on her right to remuneration under the agency agreement. Once the conditions for earning commission are met, the principal must pay it. Ratification belongs to the principal, and an agent is normally not liable on or entitled to enforce the main contract.

  1. AHer right to remuneration according to the agency agreementCorrect
  2. BHer right to hold the buyer liable on the contract
  3. CHer right to ratify the contract after it is concluded

Explanation

An agent is entitled to the remuneration agreed in the contract once the conditions for earning it are met. Ratification is a right of a principal, not an agent, and the agent is generally not a party to the contract with the buyer.

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