ICANBusiness LawLaw of Agency2020

Chukwuma was engaged as an agent by Segun to negotiate the purchase of a commercial building. Chukwuma secretly purchased the building himself through a front company for ₦80,000,000 and resold it to Segun for ₦100,000,000, falsely representing that the vendor refused to accept anything less. Segun paid the ₦100,000,000 purchase price and also paid Chukwuma his agreed 5% agency commission of ₦5,000,000. Upon discovering the fraud, what is the total monetary amount Segun is entitled to recover from Chukwuma under the Law of Agency?

A₦20,000,000
B₦25,000,000CORRECT
C₦15,000,000
D₦105,000,000
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
An agent who makes a secret profit in breach of fiduciary duty must disgorge the secret profit to the principal and forfeits his right to commission. Segun is entitled to recover the secret profit of ₦20,000,000 (₦100,000,000 − ₦80,000,000) plus the refund/forfeiture of the ₦5,000,000 agency commission paid, totaling ₦25,000,000.
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