Contractual Liabilities

Contractual Liabilities
A company secretary enters into a service contract with the company and accordingly he has several contractual liabilities which arise out of his service agreement. These may be as follows:
(i) The secretary derives his powers from the Board, therefore, he should carry
out the orders given to him.
(ii) He should work for the company and should never allow his personal interest
to clash with the interest of the company.
(iii) He shall be liable to account for the secret profit made by him by virtue of his
position as a secretary.
(iv) He shall be personally liable if he acts beyond his authority.
(v) He shall be liable for any loss or damages caused to the company by wilful
misconduct or negligence in the discharge of his duties.
(vi) He shall be liable to indemnify the company for any loss suffered by the
company as a result of disclosure of some secret information relating to the
company.
(vii)He shall be liable for any fraud or wrong committed in course of his employment.
However, if the secretary performs his duties diligently and honestly, he shall not
be liable. The secretary shall also not be liable for’any fraud by his assistants unless he
is a party to such fraud.