• 4 Marks

BL – Nov 2023 – L1 – SB – Q2d – Agency Law

Explains the concept of a del credere agent and lists the duties of a principal to an agent.

As business became more complex, the concept of agency was developed to facilitate transactions.
Required:
i. Explain del credere agent. (2 Marks)
ii. State TWO duties of a principal to an agent. (2 Marks)

A del credere agent is an agent who, in return for a higher commission, guarantees to indemnify the principal against losses that may arise if a third party defaults on payment or delivery under the contract.

ii. Duties of a principal to an agent:

  1. Duty to pay the agent’s commission.
  2. Duty to indemnify the agent for all lawful acts carried out by the agent on the principal’s behalf.
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