Jim was engaged by Nick as his agent to purchase a parcel of land for him. Jim approached the owner of the land and offered to sell the land for him as his agent if he would pay a commission on the sale. The owner agreed, and the sale was arranged with Nick. Without disclosing details of the transaction, Jim collected a commission on the sale from both Nick and the landowner. If the secret commission was discovered, Nick would be entitled to collect the secret commission paid to Jim by the landowner.

Question

Quizplus · Accepted Answer

Nick, as the principal, would be entitled to any secret commissions earned by his agent, Jim, from the transaction. This is because agents owe a fiduciary duty to their principals, which includes a duty of loyalty and a duty to avoid conflicts of interest without the principal's informed consent. By not disclosing the commission from the landowner, Jim breached these duties.

Jim Was Engaged by Nick as His Agent to Purchase