Observation

Most candidates could not differentiate between agency/partners and contract generally. As such they explain way of ending a partnership in (a) above like death, insanity, insolvency etc.

The expected responses to the question include:

(a)     Ways of terminating a contract:

          contract, they may both agree to terminate it.

          contract, it is automatically terminated.
(iii)     By breach: a contract is terminated if one party fails to perform its part of                                     the contract.

          rendered impossible due to factors beyond its control or not
contemplated by the two parties e.g. death, ill health and government legislation
(v)     By lapse of time: a contract is terminated after the period stipulated for it  has ended.
(vi)     Bankruptcy: a contract can be terminated when either of the parties is
declared bankrupt.


(b)      Duties of an Agent to his Principal

1. The agent must obey all lawful instructions by his principal.
2. He has to exercise reasonable care, skill and diligence in performing his duties.
3. He must act in good faith and honesty for the benefit of his principal by not competing with him or divulging his secrets.
4. He must act personally and not delegate his duties to someone else.
5. He must render account of his stewardship to his principal whenever required.
6. He must not make any secret gains or commission beyond what is authorised by his principal.
7. He must disclose dealings of conflicting interest with the principal so as to obtain permission to carry them out and obtain commission outside what is paid by the principal.