British American & Eastern Co. v. Wirth, Ltd.
United States Court of Appeals for the Second Circuit
592 F.2d 75 (2d Cir. 1979)
As Frederick Sunley (plaintiff) approached retirement from his role as a U.S. sales representative for a foreign steel mill, he contracted with Manfred Wirth (defendant) to take over the role, and the two signed an agency agreement authorizing Sunley to take customer orders on Wirth's behalf. When Sunley sued Wirth for unpaid sales commissions, Wirth countered that Sunley had accepted secret bribes from customer Non-Ferrous in exchange for increasing its aluminum allocation; the district court found the alleged bribes irrelevant to the breach-of-contract claim and ruled for Sunley, and Wirth appealed.
Whether an agent breaches the duty of loyalty owed to a principal by accepting, without the principal's knowledge, payments from the principal's customers intended to influence the principal's business.