Assignment 1

CASE STUDY: TOPIC AGENCY UNIT 5

Mrs. P appoints A as her agent to sell a painting. She tells him under no circumstances to sell the painting for less than $10,000, although she hopes to raise at least $15,000. Explain the legal position of the parties (Mrs. P and A) in each of the following alternative scenarios.

(i) A sells the painting to T for $7,500

(ii) A buys the painting on his own account for $10,000 and subsequently sells it on to T for
      $13,000 for a personal profit

(iii) A sells the painting on to T for $10,000 and receives a commission of $1,000 from T. What
      would make the situation correct?

In your answer for each scenario:

Explain if they were right or wrong to do the action, and

Justify your response with an explanation from the text (Eg. using your knowledge of duties of Agent and Principal etc), AND

Use a case example from the text to support your answer.

Also explain what should be done to repair the situation if an error was made (Eg. Does money need to be repaid etc. and specify which party has to do what action to who, and the amount of money):