Cyprus - Andreas Neocleous & Co

CYP/18
INTERNATIONAL AGENCY AND DISTRIBUTION LAW
No agent is entitled to reimbursement of expenses incurred by him, or to
indemnity against losses or liabilities:
• With respect to any unauthorized act or transaction not ratified by the
principal;
• Resulting from his own negligence, default, insolvency or breach of duty; and
• With respect to any act or transaction which is obviously, or to his
knowledge, unlawful.
It should be borne in mind that the right to reimbursement of expenses would
not usually arise because any expenses are included in the agent's remuneration.
Agent's Accounting Duties
An agent is bound to render proper accounts to his principal on demand. 29 If an
agent fails to keep proper accounts or fails to pay his principal money or
receives a secret profit or bribe, he is liable to his principal in an action to
account for profits.
In such an action, the agent will be allowed to deduct all reasonable expenses
incurred on his principal's behalf, unless such deduction is contrary to the terms
of the agency agreement.
An agent will usually be held to be bound by his own accounts; thus, if they
show that he has credited his principal with money received, the agent will be
presumed to have received that money and will be liable for it to his principal.
However, the agent will not be liable if the account shows that the money has
not, in fact, been received or if the principal's accounts show that the agent has
not received the money.
If an account is agreed, the principal can sue on an account stated. This may be a
mere acknowledgment of a debt, in which case the agent may show that no such
debt in fact existed or that there is an account containing debts on both sides in
which the parties have agreed that the debts of one should be set against the
debts of the other and only the balance paid. It is the duty of every agent to:
• Keep the money and property of his principal separate from his own and from
that of other persons;
• Maintain at all times proper accounts of all his dealings and transactions in
the course of his agency; and
• Produce for inspection, to the principal or to a proper person appointed by the
principal, all books and documents in his hands relating to the principal's
affairs.
Every agent is under an obligation to keep an accurate account of all
transactions entered into on his principal's behalf and must be ready at all times
29 Contract Law, Cap 149, s 173.
(Release 2 – 2013)