Agency Flashcards
What is an Agent?
the three-way relationship between a principal, an agent and a third party (parties).
Who is an Agent?
The person who has authority to act for and on behalf of another, the principal, in contracting legal relations with another, third party, can create, alter or discharge legal obligations of a contractual nature between principal and third party.
Who is the Principal?
the person on whose behalf the transaction is made.
Who is the third party?
the person with whom the transaction is made to.
who is the agent?
the person who carries on the transaction.
What are the categories of Agents?
- General & Special Agent
- Mercantile Agent
- Del Credere Agent
- Commercial Agent
What must a principal have to enter into a contractual relationship?
must have sufficient legal capacity, if the contract between the principal and third party is to be valid; the contract could be void or voidable.
What is capacity the matter of?
- age of legal capacity (Scotland) Act 1991
- mental capacity Act 2005
What did s.39 of the Companies Act 2006 state about the Principal’s capacity - Juristic Person?
validity of an act done by a company shall not be called into question on the ground of lack of capacity by the reasoning of anything in the company’s constitution.
Agents Capacity
agent who lacks the capacity to enter into a contract on his behalf may yet be able to enter into a contract on behalf of the principal who has the necessary capacity.
Are formalities required for agency agreements?
No, could be made orally or written or executing a deed.
express authority
derived from the express agreement, written or verbally arranged except in a commercial agent appointment.
implied authority
derived from agency agreement, verbally or conduct of the principal or agent. Could be incidental, customary or usual.
when does apparent or ostensible authority arise?
where the agent was previously authorised but the agents authority has been limited or terminated, but a third party is unaware and deals with the agent as though he still has the authority.
What is Ratification?
unilateral act on the part of the principal can be expressed or implied from the principal’s conduct. Seeks to mend an agent’s lack of authority to act on behalf of the principal with a third party.
What is a necessity?
arises where there is an urgent need for action to protect the interest of another from an irreparable outcome.
what are the elements of the apparent or ostensible authority include?
- The principal should give the impression that there is actual authority through words or conduct.
- Must be a casual link between the action or inaction of the principal and the belief of the third party.
- Third-party must have relied on the representation and must have suffered loss as a result of that reliance.
What are the key requirements for ratification?
- Principal in existence
- Principal must have legal capacity
- Agent must enter the transaction as an agent
- Time limit
- Contract must not be void or illegal
- Principal must make an informed choice
Agency by operation of Law
parties to an agency arrangement did not intend for an agency relationship to arise, but this is deemed irrelevant where the operation of law imposes such a relationship and the consent of the parties is bestowed by law.
what are the four necessary requirements for Necessity?
- actions must be necessary
- a communication impossibility
- actions were reasonable, prudent and in good faith
- principal was competent at the time of the agents act
Partners in a partnership statutes?
Partnership Act 1890 s.5
Limited Liability Partnership Act 2000 s6(1)
Directors of a company
Companies Act s.172
the administrator and receiver of a company
Insolvency Act 1986 sch B1 para 69 s.57(1)
Negotiator in a consumer credit agreement
Consumer credit Act 1974 s.56(2)
