2017 WAEC Commerce Theory a) Explain four ways a contract can be terminated.   b) State six duties of...

a) Explain four ways a contract can be terminated.

b) State six duties of an agent to his principal.

(a) Ways of terminating a contract:

By agreement: before any of the two parties perform their part of the contract, they may both agree to terminate it.
By performance: when each party has performed their part of the contract, it is automatically terminated.
By breach: a contract is terminated if one party fails to perform its part of the contract.
By frustration: when the performance of a contract by one party is rendered impossible due to factors beyond its control or no contemplated by the two parties e.g. death, ill-health and government legislation
By lapse of time: a contract is terminated after the period stipulated for it has ended.
Bankruptcy: a contract can be terminated when either of the parties is declared bankrupt.

(b) Duties of an Agent to his Principal

The agent must obey all lawful instructions by his principal.
He has to exercise reasonable care, skill and diligence in performing his duties.
He must act in good faith and honesty for the benefit of his principal by not competing with him or divulging his secrets.
He must act personally and not delegate his duties to someone else.
He must render account of his stewardship to his principal whenever required.
He must not make any secret gains or commission beyond what is authorised by his principal.
He must disclose dealings of conflicting interest with the principal so as to obtain permission to carry them out and obtain commission outside what is paid by the principal.