ICAEW BL · Chapter 6 · Question 5 of 10
Rufus is engaged by Aldermoor Ltd to find a buyer for its surplus machinery. Without telling Aldermoor, Rufus accepts a 'finder's fee' of £3,000 from the buyer he introduces. What is the legal position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Rufus has breached his fiduciary duty and must account to Aldermoor Ltd for the £3,000
Explanation
An agent owes fiduciary duties, including not to make a secret profit or take a bribe from the third party. An undisclosed payment must be accounted for to the principal, whether or not the principal suffered a loss. The principal may also be entitled to refuse the agent's commission and to rescind the contract with the third party, but the contract is not automatically void.
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