Situation and refuses to pay commission

Reference no: EM13905326

Paul and Paulina own a private limited company known as "Permata Gemilang Sdn Bhd". The company's nature of business is to sell poultry products like fresh chicken meat and frozen foods. Paulina has appointed Jack as the company's agent to sell their poultry products in Johor Bahru. Normally, the estimated profit from the transaction will be around RM600-RM800 per sale and purchase. The agency contract has never been in written form, but mainly by verbal promise of the Company to pay commission amounting to 25% from the profit gained by Jack. It is agreed that Jack is not the company's salaried employee.

On 23/12/2013, Jack was instructed to sell the company's product in Johor Bahru for the estimated value of RM2,000.00. While en route to his destination, Jack realized that the products began to produce a stench and rotten smell. To his worry, he checked the product and found that some of them were already rotten. To avoid further loss, Jack conducted car booth sales of the remaining poultry products to other people at cheaper price. The cumulative profit is only RM240.00.

Paulina is upset with the situation and refuses to pay commission to Jack despite taking away the profit (RM240.00) from him. She claims that Jack should not have disposed the goods without her permission. On the other hand, Jack responds that Permata Gemilang would suffer more loss if he did not sell anything, and continuing the journey will cause more damage to the products.

Answer all the arising issues in the light of Agency Law in Malaysia. Refer to related provisions in the Contract Act 1950 and case laws (if any) as supporting authorities.

Reference no: EM13905326

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