03. Agency. Flashcards
T/F: A principal may still find themselves bound into a contract by an agent whose authority has been revoked.
TRUE
if the principal has not informed the third party that the agent’s authority is revoked.
T/F: a victim of a fraud by an agent whose authority has been revoked is still potentially obliged to settle a supplier’s invoice.
TRUE
if the supplier did not know that the agent’s authority had been revoked.
T/F: Modern agency law generally requires an existing contractual relationship between parties if an agency of necessity is to be established.
TRUE
Modern agency law generally requires an existing contractual relationship between parties if an … is to be established.
agency of necessity
Modern agency law generally requires an … between parties if an agency of necessity is to be established.
existing contractual relationship
T/F: Modern agency law is highly unlikely to allow a person to be bound by the acts of a complete stranger.
TRUE
A pre-existing contractual relationship is usually required before an agency of necessity can be established.
An agency by ‘holding out’ can only occur as a result of the behaviour of …
the principal.
T/F: a principal may ratify the act of an agent despite expressly forbidding them to perform that act.
TRUE
T/F: The ratification of a contract by a principal binds the third party.
TRUE
even if at the time of the agent entering into the contract they did not have authority but the contract was nevertheless ratified.
T/F: On ratification of an agent’s contract by a principal, the third party may then choose whether to enforce the contract against the agent or the principal.
FALSE
Upon ratification only the principal and the third party are bound by the contract.
Upon the ratification by a principal of a contract entered into by an agent, the third party may only enforce the contract against …
the principal.
T/F: Ratification can only validate an agent’s past acts and will not endow any future authority.
TRUE
Ratification can only act …
retrospectiviely.
A principal whose agent receives undisclosed commissions …
may dismiss the agent and require them to account for those commissions.
see Boston Deep Sea Fishing
T/F: An agent is usually entitled to delegate the tasks that they are appointed to undertake as they see fit.
FALSE
An agent is usually required to render personal service.
T/F: An agent’s duty of confidentiality ceases once the relationship ends.
FALSE
If an agency contract does not mention remuneration …
then the agent is entitled to reasonable remuneration.
An agent whose principal owes them money is entitled to exercise a right of … over the princpal’s goods and property.
lien
The acts of a partner bind the firm due to the fact that as a partner they have the … authority to do so.
implied usual
If a partner enters into contracts in the name of the firm in respect of an unrelated business activity …
then the other partners must immediatly take action or they will be estopped from doing so.
A person behaving as a managing director without challenge from the other directors …
will be treated as holding that position.
see Buckhurst Properties
A person acting as an agent without challenge from a principal has …
the ostensible or apparent authority to bind the principal into contracts with third parties.
T/F: Agency by estoppel requires a pre-existing agency relationship.
FALSE
T/F: A principal may still find themselves bound into contracts by an agent whose authority they have revoked.
TRUE
Unless they communicate this fact to third parties, then those third parties may enter into contracts via the agent.
T/F: For an agency by estoppel to exist, the third party must show that they have relied upon a representation by a principal.
TRUE
the princpal has by words or conduct ‘held out’ the agent as having authority
For an agency by estoppel to exist, the third party must show that they have relied upon a representation by a … that an agent had authority.
principal
For an agency by estoppel to exist, the third party must show that they have relied upon a representation by a principal that an agent …
had authority
T/F: In agency by estoppel, it is not necessary to show that the claimant’s loss was caused by their reliance on the representation.
FALSE
If there is no causal link between the third party’s loss and their reliance upon the representation, the third party will not be able to hold the principal liable.
T/F: In an agency by estoppel, the third party must show that they have relied on a representation that the contracting party was acting as agent for their principal.
TRUE
T/F: For an agency by estoppel to arise, there must be a pre-existing agency relationship between the principal and the agent.
FALSE
When an individual revokes the authority of their agent they should …
inform all third parties who regularly deal with the agent.
Express authority arises only in relation to …
a particular contract.
T/F: An agent, acting within their authority, can never be liable on a contract which they have entered into on behalf of a third party.
FALSE
It may have been specifically intended, or rules of trade custom and usage may apply.
T/F: An unnamed principal may never be liable on a contract entered into by an agent with authority.
FALSE
once the principal’s identity is revealed they may be sued.
If an agent acts without authority then a principal can only be liable on a contract …
if they have subsequently ratified it.
An agent deliberately acting without authority, causing loss to a third party, may be liable for the tort of …
deceit.
If an agent, believing that they have authority but in fact having none, may be liable for …
breach of warranty of authority.
AA yes, PK no
The third party may enforce the contract against …
the principal or the agent (they must choose).
AA yes, PK no
The principal may enforce the contract against …
the third party.
AA yes, PK no
The agent may enforce the contract …
against the third party, although their right to do so is subordinate to their princicpal’s.
AA yes, PK yes
The principal …
Is bound in contract with the third party.
AA yes, PK yes
The agent …
usually drops out of the picture and has no rights or liabilities under the contract.
However the parties might have intended otherwise.
If an agent does not disclose the identity of their principal …
they are more likely to be considered a contracting party.
Situations in which even a properly authorised agent might incur personal liability:
TU*, NI, COS (NT).
trade usage
Situations in which even a properly authorised agent might incur personal liability:
TU, NI*, CUS (NT).
negotiable instruments
Situations in which even a properly authorised agent might incur personal liability:
TU, NI, CUS* (NT).
contracts under seal
Situations in which even a properly authorised agent might incur personal liability:
TU, NI, CUS (NT*).
non trustee
The only situation in which a principal whose ‘non agent’ acts without authority may sue or be sued on a contract.
When the principal ratifies the contract, thereby authorising the agent retrospectively.
An ‘agent’ acting knowingly without authority may be liable for …
the tort of deceit.
An ‘agent’ acting … without authority may be liable for the tort of deceit.
knowingly
An ‘agent’ acting unknowingly without authority may be liable for …
breach of warranty of authority.
An ‘agent’ acting … without authority may be liable for breach of warranty of authority.
unknowingly
A partner’s authority no longer has effect …
once third parties have been informed of the fact.
T/F: Ostensible or apparent authority can be deemed to exist as a result of the actions of “a person with actual authority.”
TRUE
this person is usually a principal, or board of directors e.t.c.
An act done in the firm name by a person thereto authorised …
is binding on the firm and all the partners.
T/F: Only a partner may bind their firm.
FALSE
An act e.t.c. done in the firm name by any person thereto authorised is binding on the firm and all the partners.
Any act which binds the firm binds …
all of the partners.
Under agency law, notwithstanding the few exeptions, only … have rights and obligations under a contract entered into by a properly authorised agent.
the principal and the third party
T/F: The duties of an agent are limited to ONLY those explicitly appearing in the contract of authorisation.
FALSE
There are several duties implied by law, for example accountability and confidentiality.
A principal and agent have a … relationship.
fiduciary
Types of authority for an agent: AE*, AI, IU, O
actual express
Types of authority for an agent: AE, AI*, IU, O
actual implied
Types of authority for an agent: AE, AI, IU*, O
implied usual
Types of authority for an agent: AE, AI, IU, O*
ostensible
The type of authority which exists due to an agent’s office or position.
implied usual
The type of authority which exists due to specific authorisation.
actual express
The type of authority which exists due to the virtue of its being a natural consequence of specific authorisation.
actual implied
The type of authority which exists due to the behaviour of a principal; normally that of being passive when an agent exceeds their actual express, implied or implied usual authority.
ostensible or apparent
The type of agency which exists due to a pressing need for action, usually where an existing agency or contractual relationshp exists.
agency of necessity
The type of agency which exists due to an after the fact decision by a principal to agree to be bound by a contract entered into by someone not authorised as agent.
ratification
