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Report No. 13

161. Section 211.-

It is not the duty of an agent to adhere to instructions which are not lawful. This should be made clear in section 211.

162. According to this section the agent is liable to account for profits when they accrue during the breach of the duty enjoined by this section. There is no provision for accounting of profits in cases where without the breach of such duty the agent make profits. A section1 should be added providing that if an agent, without the knowledge of the principal, acquires any profit or benefit from his agency other than that contemplated by the principal at the time of making the contract of agency, he must pay such profits and the value of such benefits to the principal.2

In case such benefits consist of a bribe or a secret commission the agent is liable to summary dismissal and to pay to the principal loss actually sustained in consequence of any breach of duty on the agent's part induced by the bribe or secret commission, in addition to the forfeiture of the commission or remuneration to which he may have been otherwise entitled. It is desirable to make the necessary additions.3

1. Section 218A, App I.

2. Bowstead, 11th Edn., p. 75.

3. Section 216A, and Expl. to section 220, App I.

Indian Contract Act, 1872 Back

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