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A, an agent for the sale of goods with authority to sell on credit, sells to B on credit without making…

Section 212 requires an agent "to act with reasonable diligence" and to compensate the principal for the direct consequences of his neglect. Illustration (b) to section 212…

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A, an agent for the sale of goods with authority to sell on credit, sells to B on credit without making the proper and usual enquiries as to B's solvency. B was in fact insolvent at the time of the sale. What is A's position towards his principal?

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Correct answer C

Section 212 requires an agent "to act with reasonable diligence" and to compensate the principal for the direct consequences of his neglect. Illustration (b) to section 212 holds that A must make compensation to his principal for any loss caused by selling on credit without the usual enquiries. Authority to sell on credit does not excuse a careless choice of buyer, and actual knowledge of the insolvency is not required.

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