An agent may or may not receive payment for his role. An agent appointed by contract is usually entitled to payment by its terms. The agent’s remuneration may be by way of commission or by fixed or recurrent payments.
The appointment contract should set out the terms of any entitlement to remuneration. There may be a provision for a commission, a flat fee, or retainer. It is a matter of interpretation, as to when the entitlement to the commission is secured.
Implied Right to Commission
At common law, the default presumption is that the principal must pay commission on business actually acquired by the agent through his efforts. The agent may also be obliged to indemnify the principal against loss sustained through the insolvency of customers introduced by him.
Indemnity and Lien
An agent is entitled to be indemnified against expenses and liabilities incurred in the course of his agency. The indemnity is a right to be reimbursed for costs and expenses incurred.
Duty to Account
The agent must account to his principal in respect to all transactions entered. He must keep records and accounts. If he fails to do so, all presumptions are made against his interests and in favour of the interests of his principal. If he mixes his monies and assets and those of his principal, the remaining property may be presumed to belong to the principal, in the event of a partial loss.
Taking of Accounts
Where the relationship is complex, the matter may be referred by the court to the Examiner or another court officer for the taking of accounts. In accounting to the principal, the agent may deduct proper expenses and costs.
An agent owes fiduciary duties to his principal. This encompasses a duty to act in good faith and not to take unfair advantage of his relationship with the principal.
Accounting for Benefits
If an agent takes advantage of his position and enters a contract for his personal benefit, he must account to his principal for any benefit received. The obligation applies, even if the principal himself would not and could not have undertaken the contract’s obligations.