Forfeiture of payment to a delinquent agent
Keywords:agent, fiduciary, forfeiture of commission, money had and received, failure of consideration
A principal’s claim for forfeiture of an agent’s commission following the latter’s default can be explained from both an equitable and common law perspective. In equity, the threshold for forfeiture is imprecise and reflects the vagaries of fiduciary obligations. At common law, forfeiture can be claimed in proceedings for money had and received. However, the principal’s claim may be subject to counter-restitution in respect of the agent’s services. It is argued that the common law provides an effective means of reconciling the parties’ interests and that an approach based on failure of consideration would provide a more coherent and principled outcome in equity.