Arnold is a collector of paintings by famous artists. His agent, Sly, travels the world to

buy famous paintings from auction houses for Arnold's collection. Arnold has told Sly

that he has the authority to purchase any paintings by Leonardo da Vinci up to a total

amount of $20 million. Arnold takes frequent trips to various parts of the world and on

this occasion, he travels to the Amazon region in Brazil to study the flora and fauna of

that area. Whilst he is away, Sly comes across a painting by DaVinci called the Mona

Lisa. This painting is highly sought after by many collectors and Sly knew that Arnold

would want it very much. The bid for this painting started at $10 million. Sly bid for

the painting and eventually secured it at the price of $40 million. This amount exceeds

his budget of $20 million, which Arnold has given him. Using the legal principles of

agency, advise both Arnold and Sly on the following matters:

d. Describe at least two duties of an agent

(4 marks)

e. What kind of the authorities does the agent have in executing his/her duties on

behalf of the principal?

(4 marks)

In the above situation can Arnold reject or accept the painting from Sly. Explain

why?

(7 marks)