5. Agency II

Question 1

Montgomerie v UK Mutual

Answer 1

basic rule: A usually drops out of the picture

exception: UP (direct legal relationship between A and 3P)

Question 2

Cambria v Athersmith

Answer 2

UNNAMED/unidentified P is NOT UP (because 3P knows of P’s existence)

Question 3

Armstrong v Stokes

Answer 3

Blackburn J: where 3P discovers UP “he is entitled to take advantage of this unexpected godsend”

• 3P CAN SUE P

Question 4

Keighley v Durant

Answer 4

UP only applies if A acted with authority

• UP cannot ratify (too far)
• P never in relationship with 3P so 3P would get an advantage

Question 5

Sin Yin Kwan v Eastern Insurance

Answer 5

ONE - A must act on behalf of P within scope of his actual authority

TWO - A must intend to act for P

= UP can sue or be sued
= A can sue or be sued
= 3P can use its defences against A
= P can use A’s defences against 3P

Question 6

Exceptions to UP (where A acts within scope of actual authority)

Answer 6

a) A-X contract expressly/impliedly excludes intervention by UP
b) Personality of A is of importance to X
c) personality of UP is important to X

Question 7

Sin Yin Kwan (re: personality of A)

Answer 7

INSURANCE CONTRACT

• usually personality of A is important in these contracts (because risk is different for each person)
• but here, A took out insurance for employees (level of risk same for whether A or UP took out insurance)

IDENTITY OF A NOT IMPORTANCE TO INSURERS so UP can intervene and so PR are entitled to claim as a result

Question 8

Oyster v Randall

Answer 8

non-disclosure is not misrepresentation so can still be UP

• even if A knows 3P does not like P and wouldn’t enter contract if he knew

Question 9

Archer v Stone

Answer 9

if 3P asks and A lies = can exclude UP

Question 10

Said v Butt

Answer 10

if striking characteristic of P relevant to 3P = can exclude UP

Question 11

Shogun v Hudson

Answer 11

Said can be better explained as tickets being personal contracts so 3P wanted to deal with A (not that 3P didn’t want to deal with P)

Question 12

National Oilwell v Davy

Answer 12

Requirement: A must intend to act on behalf of P

Coleman J: SUBJECTIVE INTENTION

Question 13

Magellan v Vitol

Answer 13

Requirement: A must intend to act on behalf of P

Legatt J (obiter) - OBJECTIVE intention

THIS CAN’T BE RIGHT (otherwise req.1 and 2 are the same question)

Question 14

Watteau v Fenwick

Answer 14

undisclosed principal;

• no actual authority
• but allowed to bind P!

anomalous case

Question 15

Firbank Executor’s v Humpheries

Answer 15

BREACH OF WARRANTY OF AUTHORITY –> A can be liable to 3P

If A makes untrue representation
that induces 3P to enter contract
A is liable to injury (even if innocent)

STRICT LIABILITY

Question 16

Penn v Bristol

Answer 16

Whether there is breach of warranty of authority is a Q of whether there is RELIANCE on assurance made by purported agent

INNOCENT MISREPRESENTATION = NOT A DEFENCE

Question 17

Foxton v Theselff

Answer 17

normally, A not liable (drops out of picture)

BUT A can contractually undertake to be liable to 3P even though normally A is not liable

Question 18

Montgomerie v UK (undertaking liability)

Answer 18

A can be added as a party to the contract “if he so contracted”

Question 19

Debenham’s v Perkins

Answer 19

If A undertook liability, 3P can choose who to sue (A OR P)

Question 20

Mddle East v Abu Dhani

Answer 20

contract can provide for joint and several liability (if A agrees with 3P)

RESULT: 3P can sue either until liability discharged

Question 21

Priestley v Fernie

Answer 21

if contract is silent it is alternative liability

• can only sue one or there other
• once judgement obtained (regardless of whether there is payment) can’t sue the other

Question 22

Kelly v Cooper (contractual duty)

Answer 22

if agency arises by contract, parties have rights and duties dependent on the terms

Question 23

Chaudry v Prabhaker

Answer 23

A has a duty to exercise reasonable care and skill (even if gratuitous and not contractual)

if A knew (or ought to know) P relied on their Skill and Judgement = liable

• here A was negligent
• P relied
• business transaction

Question 24

Bristol & West v Mothew

Answer 24

a fiduciary:
- someone who undertakes to act for or on behalf of another in a particular matter

• in circumstances giving rise to relationship of trust and confidence

agents are fiduciaries but scope of fiduciary duties depends on nature of relationship

P is entitled to A’s “single minded loyalty”

Question 25

New Zealand v Kuy

Answer 25

F duties include =

• duty not to take unauthorised profits
• duty not to be in conflict

these duties = “subsidiary…form of protection” to non-F duties

Question 26

Kelly v Cooper (fiduciary duties)

Answer 26

Relationship between P&A turns only on terms of contract between them

• contract determines scope of F duties
• Agents DO NOT owe F duties for all their actions

Question 27

Morrison v Thompson

Answer 27

A has a duty to hand over money received on behalf of P

e.g. from selling goods/profits

Question 28

Paragon Finance

Answer 28

Obligation to give account to P = accounting duty

“Liability to account (arises) from receipt of money in circumstances which made him an accounting party”

INDEPENDENT FROM THEIR FIDUCIARY DUTY
- A’s failure to account properly is NOT a breach of F duty (unless failure to account is also an act of disloyalty)