Agency Flashcards
Describe what agency is used for
can be used to buy or sell goods, and to facilitate that process
What types of agency are there?
1.) Commercial
2) Confirming
3) Commissionaire
4) Del Credere
5) Freight forwarder
What is the basic principle?
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.
How is agency formed?
1) Express
2) Implied
3) Apparent
What is ratification in agency?
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.
What are the duties of an agent under CAR 1993? IPCR
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
What are the duties of an agent under common law? DMBCA
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.
What are the duties of the principal under CAR 1993? DPAI
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
Define a commercial agent
A self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another.
What does the EU Directive on self-employed commercial agents define?
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
What is the role of an agent?
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
What can you say about governing law of agents?
Some countries have particular provisions eg that the address of the agent is the governing law
Who can appoint an agent?
Anyone with contractual capacity
What can you say about the purpose?
Must be lawful; an unlicensed person cannot perform the duties of a professional
What is a confirming agent?
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
What can you say about the conformity of the order?
The agent does not guarantee the conformity of the goods, but undertakes to give proper shipping instructions and sometimes to fulfil other requirements.
Explain irrevocable agency
1- Occurs in US law
2- Created for the benefit of the agent, cannot be revoked by the principal
What is a commissionaire?
- 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
What is a Del Credere agent?
- 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.
Describe agency remuneration
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
Describe repeat orders
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.
Describe refusal of remuneration
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
