Agency 2

Question 1

INTRO-What is the 2nd lecture about?

Answer 1

Authority of Agents - excercise auth to bring about binding rels btw principal and 3rd party

-If no auth = no rels

Question 2

INTRO-Types of authority?

Answer 2

-Actual
express actual authority

implied actual authority
incidental
usual
customary

• Apparent
• Usual

Question 3

INTRO-What is easier to identify when talking about actual auth?

Answer 3

Easy to identify expressed / than implied as has many diff forms, different types of implied actual auth

Question 4

ACTUAL AUTH-What is the most known case for actual auth & what does it explain?

Answer 4

Hely-Hutchinson v Brayhead Ltd [1968] 1 Q.B. 549

• For company directors (= different type of agent in a company type sit as a company has no physical presence and you have to act through agents) a dispute arose in context of a company transaction entered into for a company they use company e.gs to think about what diff btw e a auth is and I a acuth
• explains what diff is btw expressed and implied actual auth

Question 5

ACTUAL AUTH-What is expressed actual auth?

Answer 5

• auth that has been expressed or explicitly conferred upon someone in terms of actual words eg if I have given some 1 specific auth to do something to go out and sell or make textbooks, that is expressed auth that I have given that particular person
• ‘It is express when it is given by express words, such as when a board of directors pass a resolution which authorises two of their number to sign cheques.’

Question 6

ACTUAL AUTH-Implied actual authority?

Answer 6

Implied a auth- Not given in expressed words need to look whether auth given from conduct of parties/sit cirumstances of case

Conduct- you look at conduct (mainly from principal) in the way they conducted themselves if so = auth, so not explicitly given but e.g say you’re shopkeeper do you expect just to work on till or check the whole shop etc (is there implied actual auth to do other things within the partic role appointed to you)

Question 7

ACTUAL AUTH- how are we dealing with implied actual auth relaistically?

Answer 7

‘It is implied when it is inferred from the conduct of the parties and the circumstances of the case, such as when the board of directors appoint one of their number to be managing director. They thereby impliedly authorise him to do all such things as fall within the usual scope of that office.’

• realistically you cant give expressed act for every single thing but we can say for certain acts/transactions they will fall into implied actual auth and can be binding upon you (bind togev as implied actual auth)

Question 8

-ACTUAL AUTH- what about actual auth express or implied for the parties?

Answer 8

‘Actual authority, express or implied, is binding as between the company and the agent, and also as between the company and others, whether they are within the company or outside it.’ - even if 1 party does not necc think so.

Question 9

-ACTUAL AUTH- what about expressed auth?

Answer 9

Expressed auth is conferred by expressed words, but they are not all expressed in same way it can be done in different ways,you’re not focused on the conducts you’re focused on whats been said

EXPRESSED actual auth can be:
-formally conferred
-informally conferred
(think about actual official legal docs)

Question 10

-ACTUAL AUTH- What is formal and informal expressed actual auth, what do you need to watch out for and what is the disad?

Answer 10

1. formal - it can be formally conferred by virtue of legal docs e.g power of attorney writes legal doc = high level of formality attached to it
   - Informal- it can be informally conferred as in this example by virtue of a latter, latter email or verbal that would constitute
2. beware of those where where do u find them,do you find them in a letter, email, power of attorney (where are those words actually contained) will decide whether form or informal
3. Problem- if expressed the assumption is that there is no doubt it was actually said you’re not focused on the conduct as you’re focused on whats been said e.g you were specifically auth to sell furniture etc but disputes arise by the interp of words.

Question 11

-ACTUAL AUTH- What about the dispute element of expressed words?

Answer 11

you still need to interpret words to those extent as could be debate on how we constrew words - yes expressed auth was conferred on agent but at the same time are we ALL CLEAR OF WHAT THESE WORDS MEAN?

• do they need interp
• are they ambigious ( might not be clear on instructions given)

Still will be an issue on construction of interp in expressed whether formal/informal

Question 12

-ACTUAL AUTH- What is the case for formal expressed auth?

Answer 12

Jacobs v Morris [1902] 1 Ch. 816

A appointed under power of attorney: ‘to purchase or make any contract for the purchase of goods’, ‘to make such purchase for cash or credit…’-

agent borrowed 4,000 (supposedly acting within p.o.a but used it on own purchases, was p bound by trans)

found out: not bound, fell out expressed actual auth - ct constrewed wording of p.o.a it did not extend to permitting the agent to borrow money on the principals behalf, limited to what said, not independent borrowings of money

Question 13

-ACTUAL AUTH- -what is the case for informal expressed auth?

Answer 13

INFORMAL – Johnston v Kershaw

P: ‘I beg to confirm my letter of the 23rd of February, and hope you will have executed fully all the cotton ordered, and consider still in force. If executed, please regard this as a new order for 100 more.’
A bought 94 bales.

p write letter to agents - refers to previous letter about previous order towards a ‘s of buying cotton- if fuliflled last order could you buy next 100 bales of cotton.- a did 94 - p said delivery inad and therefore not bound - dispute was based on wording of letter than a obliged to deliver 100/ does it say can fall short but wording shown p wasn’t even certain if 1st was fulfilled looks at state of market, that the order may have possibly to not be fulfilled- so even though said 100, wording indicated instruction to buy as many as could and then make difference up later = there was no expectation

court- agent could do as many as could and bring rest later - worked in a’s favour.

Question 14

-ACTUAL AUTH- What are the 3 forms of Implied actual authority?

Answer 14

3
-Incidental

-Usual
Hely-Hutchinson v Brayhead: ‘… when the board of directors appoint one of their number to be managing director. They thereby impliedly authorise him to do all such things as fall within the usual scope of that office.’

-Customary
Cropper v Cook (1868) L.R. 3 C.P. 194: usage in wool trade in Liverpool regarding brokers’ discretion

Question 15

-ACTUAL AUTH- Apparent authority

Answer 15

Hely-Hutchinson:
‘Ostensible or apparent authority is the authority of an agent as it appears to others.
It often coincides with actual authority.
Thus, when the board appoint one of their number to be managing director, they invest him not only with implied authority, but also with ostensible authority to do all such things as fall within the usual scope of that office.
Other people who see him acting as managing director are entitled to assume that he has the usual authority of a managing director. But sometimes ostensible authority exceeds actual authority…’

Question 16

-ACTUAL AUTH- What is incidental implied actual auth & case?

Answer 16

agent asked to perform partic act but they implied inc auth to do things which incidental/ related to that partic act

Rosenbaum v Belson [1900] 2 Ch. 267: ‘Please sell for me my houses …. And I agree to pay you by way of commission the sum of 2 ½ % on the purchase price accepted.’

case: rosenbam v belsom- p essentially instructed a to sell houses and pay this much by commission, a finds purchasers but also entered into agreement with those purchasers but p say not bound by those agreements, bc all asked them to do was find buyers not execute teh agreements on p’s behalf

court held: actual auth was sell house but they had implied actual auth to enter agreeements on bhealf of p

-so if youre in position where don’t want a to go further you have to be careful about conferring explic auth on them and defining limits on partic auth otherwise it will be implied inci auth to do various other things which are tied to what you’ve asked them to do.

Question 17

-ACTUAL AUTH- what is actual implied usual auth?- GO OVER

Answer 17

USUAL AUTH- relatable to concept of certain forms of implied auth comes within scope of somebodies role

• so look at position some1 given e.g managing director etc is it the implied usual auth to apply this partic act bc effectively goes within territory of what person asked to do e.g assistant expected to do things of an assistant
  case: hely - important to know- director who wasn’t actually managing directors but then had mr richards of brayhead lmtd= chairman of board and prone to making decision without consulting fellow directors

mr r entered into agreement with mr hely - mr hely to bump more money into business- mr hely Hutchinson we want u to keep ur company going for long as poss as were thinking about buying and in order to do that if u need more money into company if for any reason u should suffer loss we brayhead will indemify and restore loss- he did lose money and asked brayhead for comp- they denied laibility and said not bound- mr rich as agent of brayhead had expressed auth to privde indem, is there implied act auth?-

court held: yes there was implied actual auth - def of implied can be inferred by conduct of parties & circum of case- mr richards did usually make financial decisions he did frequently commit the company two major contracts and form other directors later then yes he could be said to have excersed that implied actual auth and if so brayhead= bound= in this case he was not managing director but if he had been then he would be able to say this falls within auth of what manging director of a company does= MAJOR CASE ON IMPLIED – GOT KNOW IMPLIED ACT AND NOT KNOW THIS –

Question 18

-ACTUAL AUTH- what is implied customary auth?

Answer 18

Customary auth- looking at did this agent have implied actual auth based on the CUSTOMS of whatever market/trade/ geographical area the agent is operating in

e. g ur agent would be saying I had implied auth bc this is how we normally operate
case: Cropper v Cook:- broker- if ur broker selling on behalf of p can u sell in own name= no only sell in p’s name- cook sold in own name p argued said not bound but hw possible to prove this was normal in the real trade in Liverpool that brokers had discretion had choice whether to sell in on names or not and so by virture of that custom, broker had implied cust auth to sell in own name to go against grain of normal conduct for conduct, so its not implied actual auth that has derivied for what p said or done it by particul trade, - this is how things are done in liverpool

Question 19

APPARENT AUTH-What is the next type of authority?

Answer 19

Apparent auth– so if ur looking whether agent exercised auth did they excersie auth or apparent auth?

Apparent auth defined in hely case - focused on not what explicit/impliedly conferred but looking at whether the agent has auth when looking at perspective from 3rd party and anyone else- if apparent= p is bound by transaction as a 3rd party you are arguing this p boun a acted in appar auth not actual

Question 20

Case for apparent auth?

Answer 20

Hely case also explains what apparent auth is its reffered to as Ostensible or apparent authority is the authority of an agent as it appears to others but we prefer appar- apparent can go way beyond actual

explains apparent can overlap act- so u can have both in same person e.g as somebodies agent, I may have actual auth in respect of things he asked me to do I (expressed or implied) i can still have apparent auth, cos when 3rd parties look at them, have more auth than appears thats how term overlap.

e.g hely managing director concept, board of directors wll appoint to be mana= implied usual auth to do somethings but point of view from 3rd party that person may have apparent auth to do way more things than his actual/implied auth allows him to do . - exists same time

Question 21

-What is it not enough with apparent auth?

Answer 21

• apparent auth were looking beyond an agency rels having being created without consent and without actual agremenet,and ur thinking about in what circumstances is principal bound where agent has acted without actual auth can this transaction still stand because were saying that agent acted with apparent auth, so in our rama corp case
• not enough to say person has apparent auth - ‘Ostensible or apparent authority … has been termed agency by estoppel…’ apparent auth is effectively a form of agency by estoppel but there are similarities btw the two and where u have this kind of agency rels, there are 3 things which have to be established,

Question 22

what are the 3 ingredients for agency by estoppel?

Answer 22

3 ingredients:

(i) a representation - come from p not a
(ii) a reliance on the representation from 3rd party, and 3rd party =
(iii) an alteration of position resulting from such reliance.’

Question 23

e.g of the 3 ingredients together?

Answer 23

So you the principal made the rep to me that this agent had auth and I relied on that rep and bc I relied, I altered my positon,I did something that I wouldn’t otherwise had done, I was induced into this particular tarnation which wouldn’t have gone into if I had known that ur agent didn’t have auth, so were saying that if a particular agent has apparent auth, we want to be able to identify that these 3 ingredients/elements are there

Question 24

limitations of apparent auth & case?

Answer 24

apparent auth cannot arise where 3rd party knows that this agent has limited auth

Armagas Ltd v Mundogas Ltd - 3rd party knew a had lim auth ( no dont have actual auth to do something) to enter in 3 yr agreement to charter a ship = no bc we said in elements 3rd party must have altered their position (in entering contract) but if knew then of course it didnt

Question 25

Armagas Ltd v Mundogas Ltd [1986] 2 All ER 385 in short?

Answer 25

‘Ostensible general authority can, however, never arise where the contractor knows that the agent’s authority is limited…’

Question 26

what about baskind?

Answer 26

Baskind p.100:
must T have altered position to his detriment?
are (ii) and (iii) separate elements?

• many cases say there needs to be but there also saying that there doesn’t need to be detriment it is enough 3rd party relied on that parituclar rep, but on top of that don’t have to prove det or suffered loss because of that reliance.
• can the seperate elements be regarded as one?- so if relied on rep can we just say assume altered pos-issue to talk about

Question 27

What is the best known case on apparent auth?

Answer 27

Best known cases on apparent auth is freeman which illustrates point of what extensive or apparent auth as compared to what looking at earlier with actual auth

Question 28

-what happened in freeman?

Answer 28

Freeman & Lockyer v Buckhurst Park Properties Ltd [1964] 2 QB 480: K a director of BPPL, hired architects to act for the company. BPPL refused to pay their fees.
F &L entitled to rely on [K’s] ostensible authority to give them instructions on behalf of BPPL: there was a holding out of K by BPPL as its agent to conduct its business within the ordinary scope of that business.
BPPL knew of and acquiesced in K’s professing to act on its behalf: impliedly representing that he has the company’s authority to do so. BPPL ‘is considered to have made the representation, or caused it to be made, or at any rate to be responsible for it.’
 as against F&L, which had altered position in reliance on the representation, BPPL estopped from denying the truth of the representation.

Question 29

freeman in my own words?

Answer 29

• company is principal - k is agent and he hires claimant who affirm of architects to provide services application of planning permisision, acrhitest do work but company wont pay and say that k had no auth to enter contract therefore not bound to pay freeman, t

Question 30

-what happened in summers v solomon?

Answer 30

Summers v Solomon (1857) El&BL 879
SS’s jeweller’s shop in Sussex managed by AS. AS ordered jewellery several times from plaintiff. AS travelled to London and purported to buy jewellery on behalf of SS, which he appropriated.
The question is, not what was the actual relation between [SS] and [AS], but whether [SS] had not so conducted himself as to make the plaintiff suppose [AS] to be [SS’s] general agent. What passes between [SS] and [AS] cannot limit the [SS’s] liability to the plaintiff.
‘ …As soon as you have given the agent authority to pledge your credit, you render yourself liable to parties who have acted upon notice of such authority…’

Question 31

-

Answer 31

• Had jewlers shop in essex and allowed nephew to manage it, and Abraham solom was one who freq placed orders for jewlerry with mr summers from London so from sussex Abraham managed his uncles shop with all the jewlerry freq and pay for jewellery when recivevd on behalf of his uncle his principle.
• at some point gets idea in head that hes going to travel to London and buy some jewl directly from mr summer having done that apparent on behalf of mr Solomon he then decides actually going to keep jewlerry for himself so uncle principal didn’t get that jewl and yet mr summer came to claim payment from him.
• Question was wehter mr solmon was bound by this transaction. Clearyl there was no actual auth that Abraham had to buy that jewl, no expressed auth no implied auth to buy the jewl directly from mr summers in London q was did he have apparent auth and could that appar auth be based on previous dealings which ahd taken place btw them, looking at history of dealigns btw parties, the fatc that mr summers had seen abrah reg place orders for jewleryy which paid for, mr summers was aware that abrah was person responsible for placing orders within shop which had preiviousl been honoured,
• it meant that mr summers was entitled to assumer when abra showed up in London that ajd apparent auth so basically that previous course of dealings mr summers was entitled tos assume that Abraham ahad apparent auth to buy jewl directly. So in this sense aswell this means that rep is not only just 1 rep u can have rep that’s built up through course of dealings btw principle and third party and the agent okay so based on that course of dealings regardless of the real rels and any auth ab had, mr summers was entitled to continue on the assumption that Abraham was his uncles general agent, and he couldn’t be bound by any limitation on abra auth cos he was no aware of them. 7
• So where u have allowed someone1 to act general agent in that way its easier to create that impression of apparent auth , so if ur in that posiotn of a principle again u want to be clear at the extent to which u would define scope of agents auth not only directly btw u and agent but also In such a way third parties are aware of that limitation.

Question 32

why is the last controversial formr?

Answer 32

Usual auth - only has short case which many people have tried to put a spin on Watteau v Fenwick

Question 33

-what happened in Watteau v Fenwick [1893] 1 QB 346?

Answer 33

F let H run hotel, forbade him to buy cigars.
W gave credit to H for items incl. cigars, sued F for value of the goods.
‘no holding out, as the plaintiff knew nothing of the defendant’
‘The cigars, however, were such as would usually be supplied to and dealt in at such an establishment.’
‘the principal is liable for all the acts of the agent which are within the authority usually confided to an agent of that character…’

Question 34

-

Answer 34

Mr fenick owned hotel and he allowed his agent h to run that hotel, and for all tends and prupsoes seemed hotel actually belonged to humble bc his name as above door etc etc but the only limitation mr humble put auth was that he could not buy cigars, u can by as many supplies to run hotel but wont be able to buy cigars,

mr wat freq dealt with this, agent sold him various items, minimal water, sold him ales, all sorts of things including cigars, so In evry auth humble had he clearly went outside that limits of that auth that ahd been inferred on him by mr finnack.

At point where mr watta was selling these cigars and other supplies to mr humble he didn’t know anything about mr fenneck. So he didn’t see humble as being an agent of a principal he dealt with humblr as though humble were the p himself.

Ultiamtely watt goes unpaid and he discovers that there is actually a principle in the picture he discovers the existence of mr feenek, tells going to goa fter mr feeneck and sue him for the amounts owed to him, and this is where things come usntuck bdc if mr watt sueing mr fen for payment on basis that mr humblr acted as mr fennicks agent if we think about forms of auth can we say that we was any actual forms of auth?

superficially was there auth- court said not apparent as there was no rep by mr fennick that mr humblr had any auth , tere was no holding on or rep that could have been relied bc up onto point sued mr wattao didn’t even know that mr fenneck had existed he didn’t know anything about principle, so if u didn’t know about principal u cannto say principle was rep to u- so no appa auth, this means looking at other forms .

In terms of expressed we can say there was no expressed actual, something told not to do, but one things courts focused on was idea that event ho this was transaction that mr humlr told not to enter into, when u look at nature purchase would fall in scope, hotel , - this meant principle bound by all acts of agent which fallw ithin scope to things relaly intrusted to that tpe o agent? So even though doesn’t have principle explcit apparent auth and it goes against what principal actual told this agent he could do, the courts still found that this fell within an agents usual auth if it fell within scope sorts of actions that usually intrusted to the agent ??then principal is bound
Doesn’t make sense cos injects very broad approach of law?? Gonna have to go back, various criticms of this and people who do not critisce are people whoa re ting tomake sense of it

Question 35

what about this case?

Answer 35

-‘the case has been almost universally criticized’ (Baskind p.100)
-‘On agency reasoning the decision is virtually impossible to justify’
-Sign-O-Lite
People have written very long essays in terms of debating whetehr decision invalid or not

Question 36

What happened in sign o lite?

Answer 36

Sign-O-Lite Plastics Ltd v Metropolitan Life Insurance Co (1990) 73 DLR 541, British Columbia Court of Appeal
‘It is astonishing that, after all these years, an authority of such doubtful origin, and of such unanimously unfavourable reputation, should still be exhibiting signs of life and disturbing the peace of mind of trial judges. It is surely time to end any uncertainty which may linger as to its proper place in the law of agency. I have no difficulty concluding that it is not part of the law of this province.’ - in this case rejecting it altgoether dont have to be trouble by it

Question 37

more backup on the watteau case?

Answer 37

‘As to the case of Watteau v Fenwick… it is not necessary for the purpose of today to say more about it than that I am at present not prepared to assent to it. Its correctness I observe is questioned in Lindley on Partnership (7th ed ), p 146.’ International Paper Co v Spicer (1906) 4 CLR 739

‘The true ratio of this decision is not altogether easy to perceive…’ Rhodian River Shipping Co SA v Halla Maritime Corp [1984] BCLC 139
These are common law juris

Question 38

what else is the courts saying?

Answer 38

, same thing in Australia, here u have a court saying well we really aren’t going to comment much on it but look on most auth texts on partnership,

partnership from of agency its correctness is questioned, so were inclined to take doubtful view of it aswell.so in austrial we don’t necc consider ourselves bound to follow it and we can see that even th heavyweight sholars are not persuaded that this is actually an authoritve source so we have nor eason to follow it either. 1 of the heavy known cases in English alw questioning wehther usual auth in watt fencik is good law is radio riving shipping but idf memeory serves high ct deci- we haevent really had any high ct deci either voerril rule fenick or addressing outright if good law or not

-forms of auth go this will tell us we have two forms accepted actuall and apparent auth with relevant sub divison and then u have usual auth which fits in tat but fits soemwher awkardley

Question 39

What about forms of auth in all?

Answer 39

some overlap when thinking about creation of agency (1) and what ur looking at forms of auth, so there is some overlap were talking about apaprrent auth and agency by estopel same thing here that we talked about agency, operation of law, agency by necc this isr egarded aswell as a fform of auth, we talked about agency by ratification last week, this is rearded as form of auth aswell

Question 40

Other forms of authority?

Answer 40

-Authority by operation of law
agency by necessity

-Authority by ratification
Agent acting for a disclosed principal
Principal in existence when contract entered into
Ratification within a fixed/reasonable time

Question 41

what is authority by operation of law?*

Answer 41

With auth by operaton by law – agency by necc remember that has 3 elemets that need to be sairsifed, the idea that there should be an aemrgency, should impossible to get agents instructions and that the agent should have acted in good faith.

Question 42

-what is auth by rati*

Answer 42

• There has to be elemetns that are satisfied there, not going to repaeat and go over them, bc o these overlaps, in exam contet u wouldn’t find self in position where have to answer q on creation of agency and q of auth so if u going addres these either addressing in creation of agency conrect or auth context would have to ind sel in poston where have to duplicagte them.

Question 43

Summary – Authority of agents

Answer 43

A’s Authority enables him to affect P’s position with T

Types of authority:
expressly conferred by P
treated by law as having been impliedly conferred on A
apparent from representation by P to T that A has authority to enter into a particular transaction
usually enjoyed by person in agent’s position

‘Although agency cases and texts repeatedly speak in terms of the agent’s authority, … this affords an incomplete account of agency.’ Munday

Question 44

ending?

Answer 44

• so we know creation
• know types
• need to know these and be able to identify in exam or is there an abadonment of any of them is ther any issues attached for higher marks, some fussier than others or overlap