Agency

Question 1

Describe what agency is used for

Answer 1

can be used to buy or sell goods, and to facilitate that process

Question 2

What types of agency are there?

Answer 2

1.) Commercial
2) Confirming
3) Commissionaire
4) Del Credere
5) Freight forwarder

Question 3

What is the basic principle?

Answer 3

agent is paid to arrange contracts on behalf of the principal.
Anyone can appoint an agent overseas, providing they themselves have capacity to enter into business.

Question 4

How is agency formed?

Answer 4

1) Express
2) Implied
3) Apparent

Question 5

What is ratification in agency?

Answer 5

If agent has exceeded authority, then principal can ratify the act. In order to ratify must be in a capable situation to enter into the agreement at the time the agent purported to act on his behalf.

Question 6

What are the duties of an agent under CAR 1993? IPCR

Answer 6

1) agent must look after the interests of his principal and act dutifully and in good faith
2) Make proper efforts to negotiate and, where appropriate, conclude the transactions he is instructed to take care of
3) Communicate to his principal all the necessary information available to him
4) Comply with reasonable instructions given by his principal

Question 7

What are the duties of an agent under common law? DMBCA

Answer 7

1.) Reasonable diligence.
2.) Disclose all material facts
3.) Not to accept bribes or to make secret profits
4.) Not to divulge confidential information
5.) To account to the principal.

Question 8

What are the duties of the principal under CAR 1993? DPAI

Answer 8

1) Act dutifully and in good faith.
2) Must provide the agent with the necessary documentation concerning the goods and information to enable the agent to carry out the contract.
3) Advise the agent in reasonable time if anticipates volume will be lowed.
4) Inform the agent of his acceptance, rejection or non-performance of any contract involving the agent

Question 9

Define a commercial agent

Answer 9

A self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another.

Question 10

What does the EU Directive on self-employed commercial agents define?

Answer 10

1) Agent has authority to negotiate contracts on behalf of the principal
2) The agent may be a natural person, partnership or company
3) The agent shall automatically be entitled to commission on order placed by customers introduced by it
4) The agent has the right to a termination indemnity

Question 11

What is the role of an agent?

Answer 11

1) Not a contracting party
2) Paid commission usually by the exporter on sales he negotiates with buyers
3) Not an employee
4) Resides abroad
5) Enquiries as to status are usually made through the parties’ banks

Question 12

What can you say about governing law of agents?

Answer 12

Some countries have particular provisions eg that the address of the agent is the governing law

Question 13

Who can appoint an agent?

Answer 13

Anyone with contractual capacity

Question 14

What can you say about the purpose?

Answer 14

Must be lawful; an unlicensed person cannot perform the duties of a professional

Question 15

What is a confirming agent?

Answer 15

1) An overseas importer buys UK goods through a confirming house resident in the UK. They then enter into two legal relationships:
- One with the overseas customer for whom the confirming house procures certain goods.
- One with the seller in the home market with whom the confirming house places an order.
-.1 This gives three potential relationships; with the most common being:
A confirming house places an order as an agent of the buyer, but indicates that it intends to hold itself responsible for the price.
-.2 If the buyer does not pay, the agent must, but they have a claim against the buyer.
-.3 an unpaid agent has the same rights as an unpaid seller: resale, lien and stoppage in transit

Question 16

What can you say about the conformity of the order?

Answer 16

The agent does not guarantee the conformity of the goods, but undertakes to give proper shipping instructions and sometimes to fulfil other requirements.

Question 17

Explain irrevocable agency

Answer 17

1- Occurs in US law
2- Created for the benefit of the agent, cannot be revoked by the principal

Question 18

What is a commissionaire?

Answer 18

1. A commissionaire arrangement is a variation of agency under which the principal is not bound to the customer by actions of the commissionaire. It originates from civil law systems for example the NL. It refers to a person who sells goods in their own name, but for the account of the principal

Question 19

What is a Del Credere agent?

Answer 19

1. An agent who undertakes to indemnify the principal against the inability of the customer to pay introduced by it. Only in cases where the buyer becomes not insolvent, not where the buyer withholds payment due to breach of contract.

Question 20

Describe agency remuneration

Answer 20

An agent is entitled to commission as a result of his actions or where they have an exclusive right to a specific geographical area of group of customers.
1) Commission is only entitled in accordance with the terms of the contract
2) Commission only falls due when the principal has been paid by the third party or should have been paid by the third party had the principal performed its part of the transaction
3) Should not be paid later than the last day of the month following the quarter in which it became due

Question 21

Describe repeat orders

Answer 21

Need to consult agency contract whether entitled to commission on repeat orders. If no express provision, they are entitled to commission on repeat orders, of the first order was a direct result of the agent’s efforts.

Question 22

Describe refusal of remuneration

Answer 22

If the agent himself is in breach of their obligations under the contract of the principal under the contract of agency, but the contract of sale has been concluded by the principal, he forfeits his commission as he has acted in bad faith