Mrs. Mutua employed Emmah as her sales agent. For several years Emmah sold goods to Mrs Cool, the proprietor of Ever Smart Boutique. Subsequently, Mrs. Mutua dismissed...

      

Mrs. Mutua employed Emmah as her sales agent. For several years Emmah sold goods
to Mrs Cool, the proprietor of Ever Smart Boutique. Subsequently, Mrs. Mutua
dismissed Emmah but did not inform Mrs. Cool of Emmah‟s dismissal.
After her dismissal, Emmah collected Sh. 50,000 from Mrs. Cool on behalf of Mrs.
Mutua. Mrs. Mutua has demanded the Sh. 50,000 from Mrs Cool who has refused to pay as she had
already paid Emmah. Mrs Mutua intends to sue Mrs Cool.

Advise Mrs. Mutua.

  

Answers


Maurice
This problem is based on the liability of the principal for transactions entered into by the
agent.

As a general rule the principal is liable on contracts entered into by the agent within the
scope of his authority.

In this case it is implicit that Emmah had previously collected monies from Mrs. Cool
having dealt with her on behalf of Mrs. Mutua.

Hence she had authority to accept payment on behalf of Mrs. Mutua.
Since Mrs. Mutua did not notify Mrs. Cool of the dismissal of Emmah as an agent, Mrs.
Cool was discharged on payment to Emmah.

Mrs. Mutua has no actionable claim against Mrs. Cool as payment to the agent discharges the 3rd
party if the agent has authority to accept payment.
maurice.mutuku answered the question on April 25, 2018 at 12:04


Next: What are the circumstances under which a principal may be estopped from revoking an agent's authority?
Previous: State and explain four reasons for delegated legislation.

View More CPA Commercial Law Questions and Answers | Return to Questions Index


Exams With Marking Schemes

Related Questions