"Save The Animals" ("STA") is a not-for-profit organisation that seeks to raise general public awareness for animal welfare. STA funds its operations through the sale of animal- themed merchandise to the public. Thomas recently graduated from university, and as he supported the cause for animal welfare, he applied for and secured a job as a sales executive with STA. STA issued an appointment letter to him which stated as follows:

"STA hereby appoints you as a sales executive, and your job responsibilities include selling STA merchandise to the public."

A few months into the job, Thomas took a cab to the airport to meet with a potential customer called Eddie, who was visiting Singapore for a short time. Eddie was impressed with STA's mission, and decided to buy $2,000 worth of STA merchandise. Under STA's internal policy (which has been communicated to all sales executives), for sales transactions involving a sum of more than $1,000, the STA sales executive is required to ask for a cheque (payable to "STA") from the customer instead of collecting cash. However, Eddie did not have his cheque book with him, and Thomas was eager to close the deal quickly. Thomas therefore accepted the $2,000 payment from Eddie in cash, and deposited it into his own bank account. A few days later, as Thomas needed to pay his personal bills urgently, he decided to use the $2,000 in his bank account (i.e. the amount collected from Eddie) to do so. Thomas honestly believed that he could make up for this shortfall after he receives his salary for that month.

(a) Describeone (1)way in which the agency relationship between STA and Thomas could have arisen in the above scenario. Support your answer with specific examples based on the above scenario. (8 m)

(b) Outline and discussthree (3)duties that Thomas has breached as an agent. Support your answer with specific examples based on the above scenario. (12 m)