Monograph : Agency Law Contents   (6) Agent's rights against principal under common law     1. Right to remuneration           a. Under common law, an agent is only entitled to remuneration for his services as an agent if the terms of the agency agreement so provide.     b. Where the agency agreement does not expressly provide for payment of remuneration to the agent, and there is a dispute between the principal and agent as to the right to claim any remuneration and the amount and terms of payment of such remuneration, the court may have to determine if, on the facts of the case, there are any implied terms in respect of the same in the agency agreement.     c. In deciding whether there are any implied terms in respect of any matters in an agency agreement, the court will have regard to all the circumstances of the case, such as the nature and length of the services provided by the agent, the express terms of the agency agreement, the customs and practices of the profession or trade of the agent, any previous course of dealings between the principal and the agent, etc.     d. In the business world, if services are rendered by the agent and accepted by the principal, there is often an implied term that the agent may be entitled to reasonable remuneration for such services rendered, even if there is no express agreement for the payment of remuneration.     e. Where it is expressly provided that remuneration is payable upon the happening of an event (for example, on successful completion of a transaction), the agent is not entitled to claim the remuneration until that event has actually occurred. And if the event specified does not occur, the agent will not be entitled to claim any remuneration even if he has spent time and effort in trying to bring about the event.     f. Subject to any special terms in the agency agreement, where the remuneration of an agent is a commission on a transaction to be brought about by the agent, the agent is not entitled to such commission unless his services are the effective cause of the transaction being brought about. The real question is whether the agent's action and services actually and directly bring about the contractual relation between the principal and the third party. The agent's action and services must not have been merely incidental.         2. Right to reimbursement and indemnity           a. Generally, an agent has a right to be reimbursed by his principal for all expenses and to be indemnified against all losses and liabilities incurred by him in the performance of his duties to the principal.     b. When an agent carries out his duties according to the principal's instructions and in the course of which he incurs expenses, he is normally entitled to reimbursement by the principal of such expenses, as long as they are reasonable. Expenses may include items such as travelling expenses, photocopying charges, fees for registration of documents payable to government departments, etc.     c. An agent may not have a right to reimbursement or indemnity in the following circumstances:       i. If the act of the agent is unauthorised and the same is not subsequently ratified by the principal;     ii. If the agent is negligent or otherwise in breach of his duties under the agency agreement; or     iii. If the act carried out by the agent is unlawful.         3. Right of lien           a. Subject to any statutory provisions to the contrary, an agent who is in lawful possession of goods or chattels belonging to his principal has a right to retain possession of them until payment by the principal of the agreed remuneration or reimbursement of the agent's reasonable expenses. This is generally known as a right of lien.     b. The right of lien exists only if the goods or chattels have been lawfully obtained by the agent in the course of the agency and that such goods or chattels have not been delivered to the agent with express directions, or for a special purpose, inconsistent with the right of lien. So, for example, if a piece of equipment is delivered to the agent by the principal with the express instruction to the agent to deliver the same to a third party, the agent is not entitled to claim a lien on the equipment.     c. The right of lien is normally restricted to a right of possession of the goods or chattels. It confers no right on the agent to sell, charge or otherwise dispose of the same.     d. The right of lien may also be exercised by an agent in respect of products produced or documents prepared by the agent on the instruction of the principal.     <<Back Next>>