A Critical Review of the Agent’s Commercial Duty to Refrain from Making Secret Profits At The Expense Of His or Her Principal: Repercussions for Breach of Duty

There are numerous instances under which an agent may be held liable for breaching his or her common law duty of an agency relationship. An agent owes certain fiduciary duties towards his or her principal and the former should therefore ensure that he or she does not commit a breach of duty in order to avoid possible claims that may arise as a result of such breach of duty. The broad and overarching duty of honesty plays a crucial part in any agency relationship. This duty of honesty is comprised of the agent’s responsibility to avoid conflict of interest, duty to refrain from making secret profits, duty not to disclose the principal’s information to any other parties. The central notion of this paper is to critically review the agent’s commercial duty to refrain from making secret profits at the expense of his principal. The paper further seeks to investigate the underlying reason why the law strictly prohibits an agent from benefiting from the secret profits he or she makes or gains at the expense of his or her principal