4. Agency

Question 1

Re Neveill

Answer 1

DISTINGUISH AGENCY AND RESELL

• NOT AGENCY here
• N can sell at any price
• didn’t matter that he is bound (if he sells goods) to pay T for them at a fixed price at fixed time

Question 2

Lloyd v Grace

Answer 2

solicitor is vicariously liable for clerk’s fraud

Question 3

Freeman & Lockyer v Buckhurst

Answer 3

Diplock LJ: actual authority is created by consensual agreement

• consider things you would in a contract (express words, actions)
• NOT a contract though (just consent)

Question 4

Reckitt v Barnett

Answer 4

“a power of attorney is to be construed strictly”

Question 5

Ireland v Livingston

Answer 5

ACTUAL AUTHORITY conferred otherwise than be deed

if words are ambiguous, A can bona fide accept one of the two different meanings

P cannot repudiate act as unauthorised

Question 6

European Asian Bank v Punjab

Answer 6

Robert Goff:
with modern communications available, court must consider if A can clarify with P first if time permits before acting on presumption of his instruction

Question 7

Hely Hutchinson v Brayhead

Answer 7

IMPLIED ACTUAL AUTHORITY

• because of course of previous dealings
• A often acted for P/committing P to dealings without knowledge of the board and reported it later (and they’d approve)

Actual authority not because he was the chairman (status does not equal power, need actual authority)

Question 8

Barrett v Deere

Answer 8

If individual allows another to appear to 3P as his agent = apparent authority

• let individual sit behind counter with account books
• 3P paid off debt to “A”
• 3P discharged from debt (apparent authority)

Question 9

Summers v Solomon

Answer 9

If “P” allows “A” to appear as A after agency terminated = apparent authority

• P did not let 3P know “A” is not longer an agent
• this is a representation to 3P that nephew is agent
• P liable

Question 10

Hely-Hutchinson v Brayhead

Answer 10

if P equips officer of the company with certain title, status, facilities –> reputation of greater authority flows from this status (apparent authority)

ostensible authority includes usual authority of a managing director (even if this specific one only had actual authority for ordering goods up to £500)

Question 11

Kasikorn v Akai Holdings

Answer 11

in commercial contexts, without dishonesty or irrationality, a person is entitled to rely on what they’re told

3P DOES NOT need to make enquiries unless it would be IRRATIONAL or DISHONEST (3P can assume A has authority)

Question 12

Quinn v CC Automotive

Answer 12

reasonableness of 3P belief is neither here nor there

- support of Akai Holdings

Question 13

The Ocean Frost

Answer 13

If it is clear 3P knows A does not normally have authority but relies instead on A’s claim of authority, P is not bound

• BUT 3P has claim against A for breach of warranty of authority

Question 14

First Energy v Hungarian

Answer 14

3P knew:

• A does not have authority to approve loan
• BUT A does have authority to sign letter with offer of loan

3P received letter from A

• APPARENT AUTHORITY
• P bound by A because A had authority to notify 3P that loan is approved

Question 15

Koenigsblatt v Sweet (Lord Sterndale)

Answer 15

ratification is equivalent to antecedent authority

Question 16

Wilson v Tumman

Answer 16

on ratification, P is bound by the act as if it was done with previous authority

Question 17

Boston Deep Sea Fishing v Farnham

Answer 17

P MUST have had (at time of A’s acts) power and capacity to make the contract

• if P was “enemy alien” at time of A’s act, he’d be unable to make a valid contract so no ratification

Question 18

Kelner v Baxter

Answer 18

P must have existed at time of act

- here it was a newly incorporated company and cannot ratify prior act

Question 19

Bolton v Lambert

Answer 19

RETROSPECTIVE EFFECT of ratification

• ratification retrospectively gives valid acceptance at time of purported acceptance
• ratification puts A in position as if he had authority to do the act at time it was done

P HAS POWER TO BIND HIMSELF AND 3P RETROSPECTIVELY

Question 20

Davidson v Vickery’s

Answer 20

OBITER (Issacs J)

• Bolton is wrong
• Bolton rests on idea that a person can become party to a bilateral contract without his authority or knowledge and possibly contrary to his express decision
• P is not instantly bound (can choose to ratify) but 3P IS instantly bound

“you cannot have a contract which is at the same time no contract”

Question 21

Kidderminster v Harwick

Answer 21

3P can withdraw from its obligations altogether prior to any ratification by P (not cited by Bolton)

Question 22

Asylums Board v Kingham

Answer 22

limitations to bolton:
- ratification must take place within reasonable time

• rule doesn’t apply if X’s offer was expressly subject to ratification

Question 23

Bird v Brown

Answer 23

ratification is NOT effective where it would affect property rights arisen in favour of X

• too late to stop at that point
• goods already became prop of X free from all rights of stoppage

Question 24

Re Oriental Bunk

Answer 24

A’s authority terminated without A’s knowledge but authority not revoked (no notice)