Page 69 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes
Examples:

(a) A employs B to beat C and agrees to indemnify him against all consequences of that
act. B thereupon beats C and has to pay damages to C for so doing. A is not liable to
indemnify B for those damages.

(b) B, the proprietor of a newspaper, publishes, at A’s request, a libel (defamation in
writing) upon C in the paper and A agrees to indemnify B against the consequences
of the publication and all costs and damages of any action in respect thereof. B is
sued by C and has to pay damages and also incurs expenses. A is not liable to B on
the indemnity.
6. Right to compensation for injury caused by principals neglect (s.225): The principal must
make compensation to his agent in respect of injury caused to such agent by the principal’s
neglect or want of skill.

Example: A employs B as a bricklayer in building a house and puts up the scaffolding
himself. The scaffolding is unskillfully put up and B is in consequences hurt. A must make
compensation to B.

Self Assessment

Fill in the blanks:
9. Agent who is guilty of misconduct in the business of agency is not entitled to any
remuneration in respect of that part of the business which he has……………………..

10. The principal is bound to …………….agent against the consequences of all lawful acts
done by the agent in exercise of authority conferred on him.

Caselet Insurance Companies Oppose Agent Rebating

—by M Ramesh
ver the years, it has been almost a standard practice for the agents of Life Insurance
Corporation to give their customers a part of their commission. They usually
Opaid the first quarter’s premium on behalf of the customer. That this practice is
illegal, is a fact, and therefore not a matter of opinion. However, there are two views over
whether the law should prohibit this ‘rebating’, or not.

Most life insurance companies support banning of rebating, although they all agree that
monitoring this is almost impossible. “There has to be a change in awareness level for all
customers to refrain from rebating,” says Ms Suniti Ghoshal, Head-Corporate
Communications, Aviva Life Insurance (formerly, Dabur CGU Life Insurance).
“This industry has been with a monopoly player, hence certain things have only been
done without being questioned much,” Ms Ghoshal said, in an e-mail to Business Line.
Other insurance companies agree. “An agent rebates in order to shorten his sales cycle.
This shortening of process often leads to misrepresentation resulting in poor service
quality,” says a spokesman of Max New York Life Insurance. However, another point of
view of the same issue is that there is no point in prohibiting rebating by agents, which is
Contd...

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