March 4, 2022

The term “Intellectual Property Rights” refers to the legal rights granted with the aim to protect the creations of the intellect. Intellectual property rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time. Intellectual property rights are customarily divided into two main areas: 1. Copyright and rights related to copyright. The rights of authors of literary and artistic works (such as books and other writings, musical compositions, paintings, sculpture, computer programs and films) are protected by copyright, for a minimum period of 50 years after the death of the author. Also protected through copyright and related (sometimes referred to as ―neighboring‖) rights are the rights of performers (e.g. actors, singers and musicians), producers of phonograms (sound recordings) and broadcasting organizations. The main social purpose of protection of copyright and related rights is to encourage and reward creative work. 2. Industrial property. Industrial property can usefully be divided into two main areas: One area can be characterized as the protection of distinctive signs, in particular trademarks (which distinguish the goods or services of one undertaking from those of other undertakings) and geographical indications (which identify a good as originating in a place where a given characteristic of the good is essentially attributable to its geographical origin). The protection of such distinctive signs aims to stimulate and ensure fair competition and to protect consumers, by enabling them to make informed choices between various goods and services. The protection may last indefinitely, provided the sign in question continues to be distinctive. Other types of industrial property are protected primarily to stimulate innovation, design and the creation of technology. In this category fall inventions (protected by patents), industrial designs and trade secrets. The social purpose is to provide protection for the results of investment in the development of new technology, thus giving the incentive and means to finance research and development activities

Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish. Types of intellectual property 1. Copyright Copyright is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases, advertisements, maps and technical drawings. 2. Patents A patent is a set of exclusive rights granted by a sovereign state to an inventor or assignee for a limited period of time in exchange for detailed public disclosure of an invention. An invention is a solution to a specific technological problem and is a product or a process. Patents are a form of intellectual property. The procedure for granting patents, requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a granted patent application must include one or more claims that define the invention. A patent may include many claims, each of which defines a specific property right. These claims must meet relevant patentability requirements, such as novelty, usefulness, and non-obviousness. The exclusive right granted to a patentee in most countries is the right to prevent others, or at least to try to prevent others, from commercially making, using, selling, importing, or distributing a patented invention without permission.[2][3] The word patent originates from the Latin patere, which means “to lay open” (i.e., to make available for public inspection). More directly, it is a shortened version of the term letters patent, which was a royal decree granting exclusive rights to a person, predating the modern patent system. Similar grants included land patents, which were land grants by early state governments in the USA, and printing patents, a precursor of modern copyright. In modern usage, the term patent usually refers to the right granted to anyone who invents any new, useful, and non-obvious process, machine, article of manufacture, or composition of matter. Some other types of intellectual property rights are also called patents in some jurisdictions: industrial design rights are called design patents in the US, plant breeders’ rights are sometimes called plant patents, and utility models and Gebrauchsmuster are sometimes called petty patents or innovation patents. Generally speaking, a patent provides the patent owner with the right to decide how – or whether – the invention can be used by others. In exchange for this right, the patent owner makes technical information about the invention publicly available in the published patent document. 3. Trademarks A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises. Trademarks date back to ancient times when craftsmen used to put their signature or “mark” on their products

Is failure to exercise the care toward others which a reasonable or prudent person would do in the circumstances, or taking action which such a reasonable person would not. Negligence is accidental as distinguished from “intentional torts” (assault or trespass, for example) or from crimes, but a crime can also constitute negligence, such as reckless driving. Negligence can result in all types of accidents causing physical and/or property damage, but can also include business errors and miscalculations, such as a sloppy land survey. REMEDIES In making a claim for damages based on an allegation of another’s negligence, the injured party (plaintiff) must prove: that the party alleged to be negligent had a duty to the injured party-specifically to the one injured or to the general public, that the defendant’s action (or failure to act) was negligent-not what a reasonably prudent person would have done, c) that the damages were caused (“proximately caused”) by the negligence. An added factor in the formula for determining negligence is whether the damages were “reasonably foreseeable” at the time of the alleged carelessness. If the injury is caused by something owned or controlled by the supposedly negligent party, but how the accident actually occurred is not known (like a ton of bricks falls from a construction job), negligence can be found based on the doctrine of res ipsa loquitor (Latin for “the thing speaks for itself”). Negligence is one of the greatest sources of litigation (along with contract and business disputes) in the United States.

A ‘product’ can include goods, electricity and the component parts of any product. Where a component of or raw material incorporated into a finished product is defective both the manufacturer of the component and the manufacturer of the finished product are potentially liable. A product is defective for the purposes of the CPA if its safety, including not only the risk of personal injury but also the risk of damage to property, is “not such as persons generally are entitled to expect”. A product will not generally be considered defective just because a safer version is later put on the market. In assessing the safety of the product the court will take into account all of the circumstances, specifically including: all aspects of the marketing of the product; the use of any mark in relation to the product; instructions and warnings; what might reasonably be expected to be done with the product at the time the product was supplied. This last factor allows the court to take account of the ‘state of the art’ at the time of supply. Defences to a claim under the CPA Although liability under the CPA is strict (see above), the producer has a number of defences available if a claim is made. It is a defence to show: that the product is defective in order to comply with domestic or European law; the party the claim is being made against did not supply the product; that the product was not manufactured or supplied in the course of a business; that the defect did not exist at the time the product was put into circulation; if the party is being sued because it manufactured a component – that the defect is a defect within the finished product, and came about because of the way the finished product was designed or because of instructions given by the manufacturer of the finished product. The CPA also includes a ‘development risks’ defence, which creates a defence if the “scientific and technical knowledge” at the time the product was manufactured was not such that the producer of a similar product might have been expected to discover the defect. This could be particularly important in relation to innovative and high-tech products. However it has been argued that the wording of the UK law is less strict than the wording of the law at European level, which deals with the state of scientific and technical knowledge generally rather than what a producer of similar products might be expected to discover. How long are producers liable for? The basic limitation period for claims under the CPA is three years from the date of damage or injury. However, since damage may not be immediately apparent, an alternative period of three years from the date when the producer knew – or could reasonably have known – of the claim, is provided. Since a product may remain in circulation for many years, a claim cannot be made more than ten years after the product was put into circulation

The CPA introduced statutory liability for defective products. Liability under the CPA exists alongside liability in negligence, and in some cases a common law claim may succeed where a claim would not be available under the CPA. The CPA applies to both products used by consumers and products used in a place of work. The CPA imposes strict liability on manufacturers of defective products for harm caused by those products. This means that people who are injured by defective products can sue for compensation without having to prove that the manufacturer was negligent. It is merely necessary to prove that the product was defective, and that any injury or damage was most likely caused by the product. Applicability The CPA applies to all consumer products and products used at a place of work. The inclusion of ‘products used at a place of work’ extends the scope of the law to include sales of products between businesses rather than just sales to consumers if such products are used in a place of work. A claim may be brought under the CPA by any person who is injured by a ‘defective product’, regardless of whether that person purchased the product. A claim may be brought for death, personal injury or damage to private property in excess of £275. However, no claim may be brought for damage to business property or for ‘pure’ economic losses. In particular, the CPA provides that a claim cannot be made for the loss of or damage to the defective product itself. Other than these restrictions, the CPA imposes no financial limit on the producer’s total liability. Who is liable? Under the CPA, the ‘producer’ of a product is liable for any defects. The producer is the manufacturer of the finished product or of a component of the finished product, or any person responsible for an industrial or other process to which any essential characteristic of the product is attributable. Liability may also be imposed on any party who holds itself out to be the producer through the use of a name or trade mark, and any person who imported the product into the European Community. As such, there may be more than one party liable under the CPA in respect of the same damage. Liability is joint and several, so the injured party may sue any or all of these people. Liability cannot be excluded or limited

Product liability for negligence Product liability is the area of law in which manufacturers, distributors, suppliers and retailers are held responsible for any injuries products cause. Regardless of any contractual limitations of liability if a product or any of its component parts are defective its manufacturer may be liable for damage under the Consumer Protection Act (CPA) or the common law of negligence. An action under the CPA or for negligence can be brought for death, personal injury and damage caused to private property as the result of a product defect. Neither type of action can be used to compensate for pure economic or consequential loss. Liability for negligence A claim in negligence is based on the assumption that the manufacturer owes a duty of care to all those who can reasonably be expected to make use of its product. In the case of ‘dangerous’ products such as those which, if defective, could cause extensive harm this duty may be owed to anybody who may reasonably be affected by a defect in the product. This means that a claim in negligence is not limited by the doctrine of privity of contract, which states that only a party to a contract can sue under it. A claim may be brought by a consumer-purchaser of the product, a person who uses the product or a third party bystander who is injured by the product. The manufacturer’s negligence may be: a failure to take care during the manufacturing process, resulting in a particular product being defective; a failure to take care during the design of the product, including a failure to carry out sufficiently careful research; a failure to carry out effective tests; a failure to provide an effective warning of dangers; a failure to recall a product, or to issue appropriate warnings if a danger becomes apparent after the product has been put into circulation. Liability is not limited to the manufacturer of the product – other parties who supplied components or distributed the product may be held liable if they can be shown to have been negligent. Limitations on negligence liability Despite the significance of negligence liability, it is subject to a number of limitations which may restrict its effectiveness in product liability claims. The manufacturer can only be held liable where it has failed to take reasonable care, which the injured party must be able to prove. This may be difficult and expensive. In some cases, particularly concerning manufacturing defects, the injured party may be able to rely on the principle of ‘res ipsa loquitur’ – meaning that no explanation other than negligence can be the case. If this applies, it is up to the manufacturer to prove that it did in fact take reasonable care. In cases like this, it may be difficult for the manufacturer to avoid liability unless it can show how the defect occurred. The manufacturer will have to show that it took reasonable care to establish a safe system of production and quality control to avoid defects, and that the employees who implemented that system took reasonable care when doing so. Where the complaint is a result of negligent design, the injured party’s position will be much weaker. Expert evidence will be necessary to establish negligence. The courts may be reluctant to impose liability for negligent design as this would involve ‘second guessing’ executive decisions on the relative cost and benefit of different design options. A second difficulty faces the injured party is the need to establish a causal link between the defendant’s negligence and his own loss or injury. However, he would also have to do so if his claim was under contract. Since the action is one for common law negligence, the manufacturer will be able to rely on any of the usual defenses available in tort. For example, the manufacturer may be able to rely on the partial defense of contributory negligence if the injured party ignored warnings, misused the goods or continued to use them after a danger becomes apparent. A further restriction on negligence actions is that, although damages may be awarded for personal injuries or damage to property, damages will generally not be awarded for purely economic losses.

Definition This is the substitution of an original party to a contract with a new party, or substitution of an original contract with a new contract. Upon substitution, the obligations of the withdrawing-party are automatically discharged and no express-release is required. To be effective, however, the substitution must be agreed-to by all the original and new parties to the contract. Novation is never presumed; if the novation agreement is not in writing, it must be established from the acts and conduct of the parties. Novation is not the same as assignment of an agreement where no new agreement is needed and the rights and duties are transferred from the assignor to the assignee Novation, in contract law and business law is the act of either: 1. Replacing an obligation to perform with another obligation; or 2. Adding an obligation to perform; or 3. Replacing a party to an agreement with a new party. Novation is a process by which contractual rights and obligations are transferred from one party to another. Whilst the benefits of a contract can be transferred by assignment, if the parties wish to transfer both the benefits and the burdens then this must be done by a novation agreement. A novation occurs when there is a rescission of one contract and the substitution of a fresh contract in which the original contractual obligations are carried out by different parties. In building design and construction, novation normally refers to the process by which design consultants are initially contracted to the client, but are then ‘novated’ to the contractor. This is common on design and build projects where the design team are appointed by a client to carry out initial studies or prepare a concept or detailed design, but then when a contractor is appointed to carry out or complete the design and construct the works, the design team (or part of it) is novated to work for them. This can be beneficial to clients as it maintains continuity between pre-tender and post-tender design whilst leaving sole responsibility for designing and building the project with the contractor. Novation effectively over-writes the contractual history to give the impression that the consultant has worked for the contractor throughout the project (NB. the process of novation in itself does not make a contractor responsible for any design carried out for the client prior to novating their contract. To achieve this the building contract needs to specifically state that the contractor has examined the design and adopted it). Alternatively, there may be a ‘consultant switch’, which simply transfers the consultants from working for the client to working for the contractor, without altering the contractual history. A novation agreement is not possible without consent. If novation and the form of novation agreement were not agreed when the consultant‘s was initially appointed, they are under no obligation to agree to be novated. It is essential therefore that the principal contracts between client and consultants and between client and contractors contain express terms obliging the contractor and the consultant to enter into the novation agreement. To avoid the risk of merely having an agreement to agree which is unenforceable, a specimen form of the proposed novation agreement should be appended to the original contractual documentation. It is important that any novation documentation is properly drawn up and that it makes clear which services consultants performed for the client and which they will now perform for the contractor, otherwise initial appointment agreements may be rendered meaningless, for example a requirement for the consultant to inspect the contractor’s work and report to the client (when they are in fact now appointed by the contractor). The process of novation can leave designers feeling they have mixed loyalties and there can be difficulty determining where liability lies for design work carried out before novation. If the contractor does not take on the design team effectively as if they had been the employer from the beginning therefore, it may be wise for them to obtain warranties for pre-novation services from the designers. The client may also require collateral warranties from novated designers (see Blyth & Blyth Ltd v Carillion Construction Ltd). Examples of novation For example, if there exists a contract where Dan will give a TV to Alex, and another contract where Alex will give a TV to Becky, then, it is possible to novate both contracts and replace them with a single contract wherein Dan agrees to give a TV to Becky. Contrary to assignment, novation requires the consent of all parties. Consideration is still required for the new contract, but it is usually assumed to be the discharge of the former contract. Another classic example is where Company A enters a contract with Company B and a novation is included to ensure that if Company B sells, merges or transfers the core of their business to another company, the new company assumes the obligations and liabilities that Company B has with Company A under the contract. So in terms of the contract, a purchaser, merging party or transferee of Company B steps into the shoes of Company B with respect to its obligations to Company A. Alternatively, a “novation agreement” may be signed after the original contract[3] in the event of such a change. This is common in contracts with governmental entities; an example being under the United States Anti-Assignment Act, the governmental entity that originally issued the contract must agree to such a transfer or it is automatically invalid by law. The Advantages As an employee, novated leases are effectively a way of incorporating a vehicle into your salary package. Put simply, you secure the lease, but your employer makes the lease payments out of your salary through a novation agreement. A novated lease allows the employer to take the vehicle payments and maintenance costs from an employee‘s pre-tax salary. This cuts the employee‘s taxable salary and consequently, the amount of income tax they will pay. Novated leases offer the employee more flexibility with the selection

This doctrine is to the effect that only a person who is party to a contract can sue or be sud on it. It means that only a person who has provided consideration to a promise can sue or be sued on it. It means that a stranger to consideration cannot sue or be sued even if the contract was intended to benefit him. It was so held in Scruttons Ltd v. Midland Sillicones Ltd. In Price Easton, X agreed to pay the plaintiff a sum of money if Y did some work for him. Y rendered the services to X but X did not honour the promise to pay. The plaintiff sued to enforce the promise. It was held that the promise was unenforceable as the plaintiff was not a party to the transaction. He had provided no consideration. A similar holding was made in Dunlop v. Selfridge as well as in Tweddle v. Atkinson. However in certain circumstances, persons who are not party to a contract or who have not provided consideration may sue or be sued on it. These are exceptions to the Doctrine of Privity of Contracts Agency In an agency relationship, the agent contracts on behalf of the principal. The principal is not directly involved in the transaction. However the principal may sue or be sued on a contract entered into by the agent. This exception is more apparent than real as in law the agent represents the principal. Legal Assignment Under the provisions of the ITPA4 if a creditor assigns his debt to another person in a legal assignment the assignee becomes entitled to sue the debtor as if he were the original creditor. Negotiable Instruments A holder of a negotiable instrument can sue on it in its own name not withstanding the absence of consideration provided a previous holder of the instrument gave some consideration. Trust This is an equitable relationship whereby a party expressly impliedly or constructively holds property on behalf of another known as the beneficiary. In certain circumstances, the beneficiary can sue or be sued under a trust. Third Party Insurance Under the provisions of the Insurance (Motor Vehicles Third Party Risks) Act5, , victims of motor vehicle accidents are entitled to compensation by Insurance companies for injuries sustained from the use of motor vehicles on the road. However the insurer is only liable if the motor vehicle was in the hands of the insured or some authorized driver. If the authorized driver pays the amount due to the victim for the injury, such amount is recoverable from the insurer but through the insured as was the case in Kayanja v. NewIndia Insurance Co. Ltd. Restrictive Covenants (Contracts running with land) In certain circumstances, certain rights and liabilities attached to land are enforceable by or against subsequent holders of the land. This is particularly the case in the law of leases

Privity of contract is the relationship that exists between the parties to an agreement. This relationship is necessary in contracts. If you want to file a lawsuit involving a contract, you therefore need to show that you and the other person were in privity of contract. In other words, you were both involved in the contract and had an established contractual relationship. The doctrine of privity of contract is that a contract cannot confer rights or impose those obligations arising under it, on any person except the parties to it. The term “parties” may seem simple enough but there are situations where it may become doubtful as to exactly who the parties are and resultantly, who, in the eyes of the law should be liable or should be compensated in event of inevitable breaches that may occur from time to time. The concept of privity is part of the bedrock called common law which was made up of the collective judicial decisions derived from court decisions. Example: Imagine that you visit your local supermarket and buy a frozen dinner. You come home, heat it up, and get sick immediately after eating the dinner. It turns out that the dinner was tainted with bacteria. You want to sue the supermarket and the manufacturer of the meal. However, you also want to sue the middleman who delivered the meal to the store. This will be a potential problem, because you were not in privity of contract with the middleman; in other words, you had no direct relationship with the middleman at all. He did not sell you the item or market the frozen dinner. Third-party rights Privity of contract occurs only between the parties to the contract, most commonly contract of sale of goods or services. Horizontal privity arises when the benefits from a contract are to be given to a third party. Vertical privity involves a contract between two parties, with an independent contract between one of the parties and another individual or company. If a third party gets a benefit under a contract, it does not have the right to go against the parties to the contract beyond its entitlement to a benefit. An example of this occurs when a manufacturer sells a product to a distributor and the distributor sells the product to a retailer. The retailer then sells the product to a consumer. There is no privity of contract between the manufacturer and the consumer.

Transfer of personal property by one party (the bailor) in the possession, but not ownership, of another party (the bailee) for a particular purpose. Such transfer is made under an express or implied contract (called bailment contract or contract of bailment) that the property will be redelivered to the bailor on completion of that purpose, provided the bailee has no lien on the goods (such as for non-payment of its charges). The bailee is under an obligation to take reasonable care of the property placed under its possession. What are the Essential Features of Bailment? 1. There should be a contract: A bailment is based on a contract, i.e., it is created by a contract. The contract of bailment may be express or implied. In some cases e.g., in case of finder of goods, a contract of bailment can be implied by law. 2. Delivery of goods by one person to another: In bailment, there must be delivery of goods by one person to another. However, the word, ‘delivery’ is very wide. It may be actual or constructive. It should be noted that in bailment, only possession of the goods passes from one person to another. Possession means control of goods to the exclusion of others. Mere custody of goods as against possession is not sufficient. For example, a master while giving his goods to his servant retains the possession with him and parts only with the custody of the goods. It should be noted that in bailment, only the possession of the goods is transferred not the ownership. Again, only movable goods can be bailed as immovable goods cannot be delivered. 3. The goods are delivered for certain purpose: The purpose may vary from safe-keeping or safe custody to repairing or changing the form of the goods. Examples: A leaves his suit-case with a Railway Cloak Room for safe custody. A gives his watch for repair to a watch-maker. A gives a piece of cloth to a tailor for stitching it into a shirt. 4. The same goods must be returned: For a transaction of bailment, it is necessary that the same goods must be returned. Where money is deposited in a savings bank account or any other account, it is not a transaction of bailment because the bank is not going to return the same currency notes but will return only an equivalent amount. However, where money or valuables are kept in safe custody, it will amount to a transaction of bailment as these will be returned in specie. It should be noted that return of goods in specie does not mean that their form cannot change. For example, old ornaments can be changed into new one. A piece of cloth can be stitched into a shirt. 5. Moveable Property It is the main feature of bailment that it is only for the moveable property and not for the immoveable property 6. Ownership Right of ownership remains with bailor and it does not change by the delivery of goods to other person. 7. Change In Shape If bailed goods shape changes in the mean time even then it remains a contract of bailment. 8. Parties of the Contract In the contract of bailment there are two parties, the bailor and the bailee. Consideration is not necessary in case of Contract of Bailment: In case of bailment for mutual benefit of the bailor and bailee, consideration is there for both the parties e.g., A gives his watch for repair to B for Ksh 10. For A, consideration is repair of his watch and for B, consideration is Ksh 10. However, in case of bailment either for the benefit of the bailor or bailee alone, consideration in the form of something in return is not there. In such cases the detriment suffered by the bailor in parting with the possession of goods is considered as a sufficient consideration to support the promise on the part of the bailee to return the goods.

The principal is only liable if the agent was acting within the scope of his authority. Authority implies permission to do or engage in a particular act. It differs from power which is a legal concept. Whereas authority creates power, power may exist without authority. Though the two concepts are at times used interchangeably, they are not the same. In certain circumstances, the agent has power but no authority e.g. an agent of necessity. Authority is the ability of the agent to effect the principal‘s legal position in relation to 3 rd parties. There are 3 types of authority an agent may have namely: 1. Real or Actual. 2. Ostensible or Apparent. 3. Presumed. 1. Real / Actual Authority This is the authority which the agent has been given by the principal under the contract between them. The authority may be express, implied, customary or usual. Express Authority: It is the authority given to the agent by the principal in writing or by word of mouth. If in writing, it is interpreted restrictively. Implied Authority: It is the agent‘s authority implied from the nature of the business or transaction which the agent is engaged to transact. It is the authority reasonably necessary to accomplish express authority. Customary or Usual Authority: It is the agent‘s authority implied from the customs, usage and practices of the transaction or business. It is the authority which every agent in a particular business or profession is deemed to have and 3rd parties dealing with such agents expect such authority. It is a category of implied authority. Agents created by agreement or ratification exercise real or actual authority. 2. Apparent/Ostensible Authority It is the authority which the agent has not been given by the principal but which he appears to have by reason of the principal‘s conduct. It is therefore apparent. Its scope is determined by the conduct of the principal. It is the authority exercised by agency created by estoppel. 3. Presumed Authority It is a category of authority created by law and which an agent is deemed to have in certain circumstances. It is not given to the agent nor is it based on the principal‘s conduct. It is given by operation of the law. It is agency created by necessity or cohabitation Liability for breach of contract If an agent with no authority to act warrants the same to a 3rd party who relied on the representation and suffers loss or damage, the 3rd party may have an action in damages against the agent for breach of authority. Authority coupled with interest It is a situation whereby the principal who is indebted to the agent gives the agent authority as a security for a debt. The agent has a personal interest in the relationship. In such a case the agent‘s authority lies irrevocable by the principal. TERMINATION OF AGENCY An agency relationship may terminate in any of the following ways: – 1. Agreement Where the relationship is consensual, the parties therefore may enter into a new agreement to discharge the agency. Their mind must be ad idem 2. Withdrawal of Consent This is termination of agency at the option of other party. The agent may renounce the relationship while the principal may revoke the same. However, agency is irrevocable if: – The agent has exercised his authority in full. The agent has incurred personal liability The agent authority is coupled with interest 2. Death of Either Party The death of principal or agent ends the agency relationship. This is because the obligations of agency are confidential and not transferable. 3. Performance Execution of the agent‘s authority in full terminates the relationship as the obligation has been discharged. The contract if any is discharged by performance. 4. Lapse of Time An agency relationship terminates on expiration of the duration stipulated or implied by trade usage or custom. 5. Insanity The unsoundness of mind of either party terminates the agency relationship since the party loses its contractual capacity. 6. Bankruptcy of the Principal The declaration of bankruptcy of the principal by a court of competent jurisdiction terminates the agency relationship 7. Frustration of Contract Agency related by agreement or contract comes to an end when the contract is frustrated. 8. Destruction of Subject Matter If the foundation of agency whether contractual or not is destroyed, the relationship terminates. 9. Cessation of Emergency Agency of necessity comes to an end when the circumstances creating the emergency cease and the party in possession is in a position to seek instructions from the owner. 10.Cessation of Cohabitation Agency by presumption from cohabitation comes to an end when the parties cease to cohabit, whether voluntarily, judicial separation or by a decree of divorce.

1. Performance: The agent must perform his obligation if the agency is contractual. He is not bound to perform if the agency is not created by agreement or where the undertaking is illegal or void. 2. Obedience: The agent is bound to obey the principal‘s instructions. This means that he must act within the scope of his authority. 3. Care and skill: The agent must exhibit a degree of care and skill appropriate to the circumstances. In ordinary transactions, the degree of care and skill is that of a reasonable man, if engaged as a professional the degree is that of a reasonably competent professional. 4. Respect for principal’s title or estoppel: The agent must respect the principal‘s title to any property he holds on the principal‘s behalf. He cannot deny that the principal has title thereto. However if a 3rd party has a better title and the agent issued, he is entitled to plead jus tertii (the other person has a better title). 5. Account: The agent is bound to explain to the principal the application of money or goods that come into his hands during the relationship. The account must be complete and honest. 6. Personal Performance or non-delegation: The agent must perform the undertaking personally as this is consistent with the maxim delagatus non potest delegare ―Delegates must not delegate‖. If an agent delegates in violation of this principle, the principal is liable for any loss or liability arising. However, this maxim is subject to various exceptions where the delegates can delegate: Where it is authorized by the contract between the parties. Where it is authorized by law.  Where it is authorized by trade usage or customs. Where it is effected with the principal‟s knowledge. Where it is reasonably necessary for performance. Where special skill is required. In case of an emergency. 7. Bonafide: As a fiduciary, an agent is bound to act in good faith for the benefit of the principal. His actions must be guided by the principle of utmost fairness. 8. Keep the principal informed: The agent must ensure that the principal is well aware of the transactions entered into. 9. Secrecy/ Confidentiality: The agent must not disclose his dealings with the principalto 3rd parties without the principal‘s consent. 10.Separate Accounts: The agent must maintain separate accounts of his money or assets and those of his principal. This is necessary for accountancy purposes. 11.Disclosure: The agent is bound to disclose any personal interest in contracts made on behalf of the principal. He must disclose any secret profit made, failing which he is bound to account the same to the principal. The phrase ―secret profit‖ refers to any financial advantage enjoyed by a fiduciary1 over and above his entitlement by way of remuneration e.g. bribe, secret commission or a benefit accruing from the use of information obtained in the course of employment. An agent may retain a secret profit if he discloses the same to the principal. If an agent makes a secret profit without disclosure, the principal is entitled to: Refuse to remunerate the agent for services rendered. Sue for the secret profit under an action for money had and received.