Question

(a)   What are the duties of Agent?

(b)   Chan has lost quite a lot of money in business. He wants to sell his flat in Discovery Bay .He contacts Gloria, a real estate agent. Gloria tells Chan that his property is worth HK$5 million. Chan asks Gloria to put it up for sale at that price. In the meantime, the property prices suddenly go up and the value of the flat has become much more than before. Gloria buys the flat in her son’s name and arranges for Chan to be paid HK$5 million. Chan discovers the truth and is furious. Advice Chan.

(a) What is Doctrine of estoppel?

(b) A clerk of solicitor firm has an authority to carry out sales of real property and to take for safe keeping title deeds of clients’ properties. The clerk fraudulently induces the client to sign some documents, which have the effect of transferring some of the client’s property to the clerk. The fraud by the clerk is committed for this own benefit.

Answer 1

(a) Duties of an Agent: The main responsibilities of an agent are-

1. The agent should be loyal to its principal and should work in the right manner to protect the interest of the principal. The agent should not misguide the principal towards selling the property at lower price to someone they know.

2. The agent should be obedient and follow the instructions of the principal. They should only sell the property at the price range set by the principal.

3. The agent should disclose all the relevant information regarding the sale of property that will protect your interest. The secrets relating to the property should not be kept from the principal.

4. The financial details of the seller should be kept confidential by the agent. Also if there is any news that principal don't want to disclose to the third party, the agent should respect that decision and maintain confidentiality.

5. The agent should tell the principal all the details regarding the accounting and where the money is being used.

6. The agent should be competent enough to understand the terms of transactions and should be able to explain you as well.

(b) Disclosure is the main responsibility of the agent to protect the interest of principal. In the above case, Gloria hid the fact that price of the flat in Discovery Bay rose up and she didn't inform Chan about the increase in price. In case of non compliance with the responsibilities of the agent, the agent is subject to penalties of non receiving of Commission, penalty for damages, revocation of real estate licence and criminal charges. Gloria is also liable for such punishment.

(A) Doctrine of Estoppel: This doctrine is the promise through words or consent, made to the promissee who relies on the words of the promisor. This principle protects the interest of the promisee who have full right to enforce the promise in the court of law if faced with any economic loss because of the promise of the promisor.

(B) In the above case, the clerk is under legal penalty for fraudulent conquer of the client's property. He is liable for legal actions and corporate actions as well. Revocation of his job role, jail and compensation are to be faced by him. His actions are not known by others and there is no involvement of others., So, he is solely liable for his deeds and is liable for punishment.