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20180919 REN responsible to owner or to his REA?

20180919 (Wed)

Is REN responsible to the principal (owner) or to his REA (agency)?

When the REN place erroneous advertisement. For example, the details of lease is 88 years, but was advertised as 33 years. Is he responsible to the principal or his REA for the mistake?

Well, the mistake is to be corrected. The REN is responsible for his mistake to his REA, and not to the principal. Nevertheless, that mistake becomes the responsibility of the REA to his principal. This is specified in S.145(2).

Agent’s responsibility for sub-agent.

(2) An agent is responsible to the principal for the acts of the sub-agent.

Thus, can a principal appoints a REN to sell his property? In law, this does NOT happen. In fact, he just informed the REN to go to back to his REA and get the instruction done. The agency contract is between this principal and the REA firm. The REN eventually is being assigned to assist the REA in working on this instruction. It is the responsibility of the REA to the principal and NOT the REN to this principal. To summarize:

Duty and Responsibility,

1. Principal, he only holds the REA responsible;

2. Third Party, he is protected by the veil principal that he holds the REN and REA responsible for the binding contract with the Principal;

3. REA, he is responsible to the principal, the Third Party and all the acts of his RENs; and

4. REN, he is responsible to the REA and wholly responsible to the Third Party when he deals directly with them, including any criminal wrongdoings (e.g. fraud).

So, a REN is responsible to his REA.

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