The duties of an agent are indirectly the rights of principal and the rights of an agent are indirectly the duties of the principal. The Principal is a person who employs the agent to work on his behalf. As being an employer, he has some rights and duties towards his agent. The Nepal Contract Act 2056 has made some provisions in this regards. The rights and duties of the principal are given below separately.

 Rights of Principal

  •  Right to revoke agent:

In case, the agent commits fraud or uses excess authority or deceives principal, the principal has right to revoke agent before the completion of work.

  • Right to instruct:

The principal has right to instruct his agent in respect of working procedure. The agent also has duty to follow his instruction.

  • Right to claim compensation.

The principal has right to claim compensation from his agent, if he does any work beyond the authority provided to him by principal or by careless or by negligence. In such case the agent is liable for the loss of his principal.

  • Right to demand secret profit

The relation between the agent and principal is fiduciary and the agent has no right to make any secret profit. If he does so, the principal has right to demand such secret earned profit from his agent.

 Duties of principal

 Duties of the principal are as follow:


  1. To provide remuneration: Although it is the matter between the principal and agent but the principal has to provide remuneration or commission as mentioned in an agreement. If remuneration is not mentioned in the agreement, the principal should provide reasonable commission to his agent.
  2. To reimburse money: The principal is liable for repaying or reimbursing money which spent by the agent to preserve the goods or performance of contract.
  3. To provide indemnity: The principal has duty to provide indemnity (Compensation) to his agent in following cases.
  • Against the consequences of lawful acts performed by the agent within his authority.


  • Against the consequences of acts performed by the agent in good faith.


  • In respect of injury caused to the agent by the principal's negligence.

d. To give reasonable compensation: In the case, where the principal removes his agent without any reason and prior notice, he must provide compensation to the agent for his loss.