Agency Flashcards
Ireland v Livingston
Ambiguous instructions given to the agent; implied that A must do everything that is necessary to follow P’s instructions
Instructions given by P were ambiguous
A acted in several ways
court here decided that as A acted reasonably and in good faith, on the possible interpretations of the instructions, P was bound
It is implied that A must do everything that is necessary to follow P’s instructions. This would apply unless the action is expressly forbidden under the contract
Hutchinson v Brayhead
Implied authority granted by allowing someone to assume a title
A was the chairman of a company whose directors allowed him to act as if he was the managing director. Without the authority, he entered into a contract on behalf of the company to act as a guarantor for T’s debts. The company wanted to avoid this contract. However, the court decided that the company was bound by the contract, as it had by conduct granted A the implied authority of a managing director
Watteau v Fenwick
An undisclosed principal can be held liable for the actions of an agent who is acting with an authority that is reasonable for a person in the agent’s position regardless of whether the agent has the actual authority to do so
Plaintiff, Watteau, sold goods to a pub manager, Humble, under the belief that Humble was actually the pub owner. Plaintiff learned that Defendant, Fenwick, was the actual owner and sought to collect from Defendant for the unpaid balance of goods purchased by Humble.
Freeman & Lockyer v Buckhurst
Where a principal (P) represents… to a third party (T) that an agent (A) has authority to act on his behalf, and T deals with A as P’s agent on the faith of that representation, P is bound by A’s acts to the same extent as if A had the authority which he was represented as possessing.
the directors allowed X to act as if her was the managing director but was never formally appointed. C agreed to a contract with a firm of architects on behalf of the company, whom the company refused to pay
- The company was liable as the directors had given the impression that X had the apparent authority to act on their behalf
Armagas Case
an agent cannot clothe himself with ostensible authority simply by saying that he has authority
T (Armagas) owned a ship which it wished to charter to P (Mundogas) for 3 years. P only wanted to charter the ship for one year. T’s shipping broker and P’s chartering manager (A) were both rogues. Pursuant to a fraudulent scheme, and without P’s permission, A purported to sign a three-year charter on behalf of P. A did not tell P that he had done this. P then signed a charter for one year. A told T that the one-year charter was a sham required for P’s internal purposes, which did not affect the validity of the three-year charter. T knew that, as a chartering manager, A would not normally have the authority to sign charterparties on behalf of P. However, A also told T that he had been given specific authority by P to sign the three-year charter on behalf of P. This was untrue. P believed it had a one-year charter. T believed it had a three-year charter. On the expiry of the one-year charter, P declined to renew it. T, believing that P was wrongfully repudiating its obligations under the three-year charter, sued P for damages.
First Energy
By appointing A as a branch manger to the position P impliedly provided A with the authority to communicate certain decisions
T (First Energy), approached A, P’s branch manager in Manchester, seeking credit facilities. A sent T a letter which T understood to mean that A had obtained P’s head office’s approval of the credit facility, and that the letter amounted to an offer by P to T to make the facility available. T knew that A himself did not have the authority to make the facility available. It transpired that at the time when A wrote to T, P’s head office had not approved the facility, and it subsequently refused to approve it.
Bolton Partners v Lambert
Effect of ratification
- A is treated as if he had the necessary authority at the time he acted. This validated the act retrospectively.
If T makes an offer to A, which A accepts on behalf of P without authority, T is bound by the contract even if he purports to withdraw even before the ratification
Kofi v Strauss
Right of remuneration is given to the agent through the contract;
The contract left the amount of commission entirely to the principals discretion. Then the Principal decided not to pay the Agent any commission at all. The court refused to pay him any money
Chaudhry v Prabhakar
Agents Duty to exercise reasonable care and skill
- P was a elderly lady who knew nothing about cars and asked a friend to be the agent. He knew a lot about cars but wasn’t a professional mechanic. She asked to find a second hand car for her and stipulated that she wanted a car that had never been involved in an accident. The A found a car and noticed that the bonnet had been repaired before but didn’t ask any questions about it. Then he told P that the car had not been involved in any accident and it actually had been and was un-roadworthy.
- In this case it was held that the agent was liable and the issue here would a reasonable man have acted in the same way and obviously he wouldn’t.
Boardmann v Phipps
Duty not to make a secret profit
-The agent was a solicitor working for a trust and the P was the trust. On behalf of the trust he attended the meeting of a company in which the trust had a minority shareholding. The solicitor used his own money to obtain a controlling interest in the company and made substantial distributions to shareholders. As a result of that the solicitor and the trust made some substantial profit. It was held that the agents were liable to account for all the profits made. Profits were made by reason of the knowledge obtained while acting as the P’s agent. He will hold it on constructive trust to the principle
FHR v Cedar Capital
Duty not to take Bribes
AG for HK v Reid
Duty not to take Bribes
Yonge v Toynbee
A’s liability under his warranty of authority; A’s liability under the warranty is strict; they will be liable to the TP even if he innocently misrepresents his authority.
Solicitors defended a client that they no longer were acting as agents for and they were found to be personally liable
Humble v Hunter
An undisclosed Principal cannot enforce a contract where it would breach a term
Term of the contract that the agent was the owner; the principal could not step in.
Dyster v Randall
P may not enforce where the personality of A or P is especially important to T; a mere disagreement won’t suffice
- P wanted to buy land from the T and they didn’t get along well.
- P knew that T wouldn’t sell land to him.
- P used the A to buy the land for him and the A did not disclose that he was acting for the P.
- T discovered the facts after the contracts were exchanged but before the completion and the TP refused to complete the contract on grounds that A mislead him.
- Held that P could enforce the contract because ti was not a personal contract. The identity of the purchaser was not material to the contract in question. In reality it was just a commercial contract for the sale of land.
- Just because they didn’t get along its not a good enough argument for P to not be able to sue T for
