This problem is based on the fiduciary obligations of an agent and the consequences of
breach thereof.
An agent is bound to act in good faith for the benefit of the principal and must avoid
conflict of interest by disclosure of any personal interest in contracts.
In this case, the agent acted contrary to the principals instructions and is guilty of breach of
the fiduciary obligations by selling the house to a relative.
Abraham is entitled to have the house back. In addition he is entitled to sue Sarah in
damages for breach of duty. Mary is entitled to a refund of the amount paid as the sale is
fraudulent as she is deemed aware of the reserved price.
maurice.mutuku answered the question on April 30, 2018 at 06:21
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