Reference no: EM132808180

QUESTION 1

(a) List six (6) exceptions to the general principle that an agent cannot delegate the authority given to him by his principal.

(b) Amat, an agent was authorised by Chong to buy a consignment of rice at the price of RM3.00 per kilogram. During the purchase, Amat came across a better quality rice which was priced at RM3.50 per kilogram. Without further informing Chong, Amat decided to purchase the better quality rice eventhough the price is higher than that authorised by Chong. His intentions were that Chong would be able to resell the rice at a higher price and make more profit. Amat made arrangements for the purchase under his own name. Chong however, failed to take delivery of the rice and the seller sues Amat for breach of contract. Advise Amat whether he (as an agent) may claim from Chong with regards to the claim made against him by the rice seller.

c) Man engages a forwarding agent by the name of Parjo, to transport a consignment of fabric from Bandung to Malaysia. Arrangements were made for the consignment to be carried by sea and landed at a certain secluded place near Tanjung Kupang, Malaysia. This is not an official commercial port of entry into Malaysia and hence Man could avoid paying import tax to the Malaysian government. Parjo was instructed to unload the consignment. While unloading the consignment at Tanjung Kupang, as instructed, Parjo was arrested by the Malaysian authorities and the consignment was confiscated. Parjo was charged with illegally bringing in taxable items into Malaysia and evading import taxes. Parjo was found guilty and paid a hefty fine for the offence. Parjo seeks your advise whether he may claim any indemnity from Man, in relation to the losses he suffered since he had acted as Man's agent. Advise Parjo.

QUESTION 2 (a) Explain the extent of liabilities of partners in the following circumstances:

(i) Amin, a lawyer, had just been appointed as a junior partner in a legal firm. His first task was to complete a transaction involving the purchase of a property on behalf of the firm's client. Joe, a senior partner in the firm is assigned to oversee Amin's work. After the completion of the Sale and Purchase agreement documentation, Joe had to go abroad on a business trip. Amin, left on his own, had forgotten to send the agreement for stamping and remittance of the related stamp duty. Under the law, delay in remitting the stamp duty for such agreements shall incur a penalty. Due to oversight, the stamping of the agreement was delayed and a penalty was levied by the authorities. The firm's client wants to claim for the excess duty he has to pay due to the delay. Explain whether the firm is liable to the client under the circumstances.

(ii) On the 1st of November 2012, the accounting firm of Jessup & Associates entered into an agreement with a building contractor to renovate their office. On the 1st of January 2013, Ali joined the firm as a partner. He signed a partnership agreement which among others, states that he agrees to be liable for the existing debts of the partnership at the time of his admission. Ali however, never read the agreement prior to signing it. The firm later faces some financial difficulties and failed to pay the building contractor. The contractor sues the partnership as a whole as well as the individual partners, including Ali. Advise Ali whether he is liable for this particular debt of the firm.