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…
Choose your answer
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?
Answer and explanation
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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