Joshua Kerabu requested Grace Kwambo to sell two laptops on his behalf at a price of not less than Sh.40,000 each. Joshua Kerabu promised to pay Grace Kwambo an agreed commission of 5% on every sale. Grace Kwambo bought one of the laptops and gave Joshua Kerabu Sh.40,000 but did not inform him that she was the buyer. Grace Kwambo sold another laptop to Clemencia Musyi at a price of Sh.50,000 and gave Joshua Kerabu only Sh.40,000. Joshua Kerabu has come to learn about Grace Kwambo’s dealings. Explain the legal principles applicable in the above case and advise Joshua Kerabu on his legal rights.

Principles applicable in Joshua Kerabu and Grace Kwambo’s case

  • An agent has a duty not to allow his interests to conflict with those of the principal
  • He also has a duty not to make any secret profit.
  • Grace Kwambo is in breach of the above duties as she was the agent and Joshua Kerabu was the principal
  • Joshua Kerabu is entitled to recover the first laptop from Grace Kwarnbo.
  • And this would effectively terminate the agency relationship in respect of that
    computer and the 5% commission would not be paid.
  • Grace Kwambo has made a secret profit on the second laptop.
  • Such a breach of her obligation would entitle Joshua Kerabu to terminate the agency relationship without notice or compensation.
  • He would also be entitled to recover the Shs.10,000 undisclosed profit and will not pay Grace Kwambo compensation
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