UNIT 10

DUTIES OF THE PRINCIPAL TO THE AGENT

The principal has several duties towards the agent under Nigerian law. These duties are foundational to ensuring a fair and efficient agency relationship.

1. Duty to Remunerate: This is where the principal is obligated to pay the agent the agreed-upon remuneration for services rendered. This duty arises from the contractual agreement between the principal and the agent. If the remuneration is not explicitly agreed upon, it is implied that the principal must pay a reasonable sum. See the case of W. A. Telecom Products Ltd. v. Barclays Bank (Nig.) Ltd. (1986) NWLR 439 where the court held that an agent is entitled to remuneration as per the terms of the agency contract.
2. Duty to Indemnify: This is where the principal must indemnify the agent for liabilities and losses incurred while acting within the scope of the agency. This includes expenses incurred and liabilities from third parties due to the agent's lawful actions on behalf of the principal. See section 192 of the Nigerian Contract Act which stipulates that an agent is entitled to indemnity for lawful acts performed in the course of the agency.
3. Duty to Provide Means: This is where the principal must provide the agent with the necessary tools, means, and instructions to perform their duties effectively. This includes relevant information and resources needed to execute the tasks assigned.
4. Duty of Non-interference: This is where the principal should not interfere with the agent's work unnecessarily. Once the principal has given the agent the requisite authority, they should allow the agent to execute their duties without undue interference.

DUTIES OF THE AGENT TO THE PRINCIPAL

The agent also has specific duties towards the principal to ensure the agency relationship is conducted with integrity and professionalism.

1. Duty to Act Within Authority: This is where the agent must act within the authority granted by the principal. Any actions taken outside this authority may not bind the principal. See the case of Pan Bisbilder (Nig.) Ltd. v. First Bank of Nigeria Plc (2000) 1 NWLR (Pt. 642) 684 where the court reiterated that an agent must act within the scope of their authority.
2. Duty of Care and Skill: This is where the agent must perform their duties with the care, competence, and diligence expected of someone in their position. This duty is especially significant if the agent is a professional. See section 168 of the Nigerian Contract Act requires agents to act with reasonable care and skill.
3. Duty of Loyalty: This is where the agent must act in the best interest of the principal, avoiding any conflicts of interest and not making secret profits from the agency relationship. See the case of Parker v. McKenna (1874) LR 10 Ch. App. 96 where the court held that an agent must not make any secret profit and must act solely for the benefit of the principal.
4. Duty to Account: This is where the agent must keep accurate records of transactions and be ready to provide a full account of their dealings on behalf of the principal. See section 168 of the Nigerian Contract Act which also covers the agent's duty to provide accounts when requested by the principal.
5. Duty to Communicate: This is where the agent must keep the principal informed about the progress and any significant developments related to the agency tasks. This duty ensures that the principal is aware of all material facts.

REMEDIES FOR THE PRINCIPAL

1. Termination of Agency: This is where the principal can terminate the agency contract if the agent breaches any fundamental duty, especially duties of loyalty and care. See the case of Olatunde v. Obafemi Awolowo University (1998) 5 NWLR (Pt. 549) 178 where the court upheld the principal's right to terminate the agency relationship due to breach of duty by the agent.
2. Claim for Damages: This is where the principal can sue the agent for any losses suffered due to the agent's breach of duty. This includes losses arising from negligence, misrepresentation, or unauthorized actions.
3. Recovery of Secret Profits: this happens if the agent makes any secret profit, the principal can claim these profits. The agent is also liable to account for such profits.
4. Injunction: This is where the principal can seek an injunction to restrain the agent from continuing any wrongful acts.

REMEDIES FOR THE AGENT

1. Right to Remuneration: This is where the agent can sue the principal for unpaid remuneration if the principal fails to pay the agreed-upon or reasonable remuneration for services rendered. See the case of Okwejiminor v. Gbakeji (2008) 5 NWLR (Pt. 1079) 172 where the court upheld the agent’s right to remuneration as agreed in the agency contract.
2. Indemnity and Reimbursement: This is where the agent can claim indemnity for liabilities incurred and reimbursement for expenses paid while acting within the scope of the agency. See section 192 of the Nigerian Contract Act which entitles the agent to indemnity for lawful acts done on behalf of the principal.
3. Lien: This is where the agent has a lien over the principal's property in their possession for unpaid remuneration and expenses. This means the agent can retain the property until payment is made. See the case of U. T. C. (Nig.) Ltd. v. Awolo (1978) 10-12 SC 99 where the court recognized the agent's right to retain possession of the principal's property as security for unpaid dues.
4. Termination of Agency: This is where the agent can also terminate the agency contract if the principal breaches fundamental duties, such as failing to provide necessary means or remuneration.

CONCLUSION

By understanding these duties and remedies, both principals and agents can better navigate their commercial relationships, ensuring adherence to legal standards and promoting mutual trust and efficiency.