agency

Question 1

def agency

Answer 1

used in legal context refers to relationship usually created by contract in terms of which the principle instructs the agent to act on his behalf to produce legally binding contracts for the principal

Question 2

mandate

Answer 2

if the contract is gratuitous then the relationship is usually known as mandate/ mandatory

Question 3

creation of contract agency

Answer 3

governed by a contract of agency could be express s.1 ROWA 1995 or orally
can also be implied principal infer concent.
or ratification can be used

Question 4

capacity of the agent

Answer 4

because the agent is simply acting as intermediary lack of capacity may not be important

Question 5

capacity of the principal

Answer 5

principal enters into contacts with 3rd party. agent = intermediary as a result the principal must have contractual capacity.

Question 6

tinevally sugar refining co v mirelees Watson &yaryan co ltd

Answer 6

example of the promotor purporting to act on behalf of a company not yet formed. companies act s.51

Question 7

express authority

Answer 7

aurthority may be stipulated in contract

Question 8

implied authority

Answer 8

if the contract is silent as to the extent of the authority, the agent has implied authority to do whatever is necessary and incidental to the completion of transaction. custom and usage of the trade may help to define scope.
can only apply to GENERAL agents not SPECIAL.

Question 9

general agents

Answer 9

appointed to carry out all the business of the principal or all of the principals business of a particular kind. the fact that an agent is general allows third party to assume that the agent possesses the authority.

Question 10

special agents

Answer 10

carry out a specific task.

Question 11

apparent or ostensible authority

Answer 11

acting without authority. a legal relationship between the principal and contractor created by a rep. made by the principal to the contractor, intended to be acted on by the contractor. the agent has authority to enter on behalf of the principal in to a contract of a kind within the scope of apparent authority so as to render the principal liable to perform any obl imposed on him by such contract.

Question 12

freeman and lockyer v Buckhurst park properties (mangal) ltd

Answer 12

agency by holding out. this arises either when a principal takes no steps to contradict the impression that an individual is agent or + encourages that impression. if a third party relies on that impression, it would be unfair of the principal to reverse that impression, particularly in the meantime the third party has acted to his detriment. in other words if the principal acts in a manner which suggests to the thirds that the agent is authorised the principal cannot there after seek to deny that the agent is properly authorised

Question 13

armagas ltd v mundogas

Answer 13

ruled that where agent is known to have no general authority to enter into transactions but agent falsely represented to the third party that he had obtained from principal specific authority to enter into a one off transaction, principal would not be bound by agent’s action.

Question 14

first energy ltd v Hungarian international bank ltd

Answer 14

it suggests that although the agent may not be entitled to rep the extent of his or her own authority, he may be authorised to communicate info on behalf of the principal. such info may include the fact that the agent is authorised to carry out a specific transaction.

Question 15

Kelly v fraser

Answer 15

it suggests that although the agent may not be entitled to rep the extent of his or her own authority, he may be authorised to communicate info on behalf of the principal. such info may include the fact that the agent is authorised to carry out a specific transaction. = as a rep by the agent as to the extent of his own authority.
factors act 1889 ss1-2

Question 16

where no prior authority has been given, the acts of the agent may be ratified by the principal

Answer 16

ratification may operate on two different level:
the agent may be authorised to do certain acts but exceed his or her authority. ratification VALIDATES the actions carried out in excess of his/ her authority
OR
ther may be no valid agency relationship but agent purports to act for a specific principal in this situation ratification creates an AGENCY relationship

Question 17

Tinevelly sugar refining co v mirrlees Watson & yaryan co ltd

Answer 17

rectification is effective if certain conditions are fulfilled the principal must have been in existance at the time the agent purported to enter into the contract on the principals behalf. s51 CA covers promotors purporting to enter into a preincorp contracts for a company.

Question 18

boston deep sea fishing v farnham

Answer 18

Ratification: the principal must have the requiste legal capacity to enter into the contract at the time the agent purported to enterinto the contract on the principals behalf. alexander ward &co confirms this

Question 19

keighly maxed v durant

Answer 19

ratification: the agent must act as an agent and must have intimated to a third party that he was acting as agent and not on his own account.

Question 20

goodall v bilsland

Answer 20

RATIFICATION: relevance of time limits and nature of ratification. effective ratification binds the principal in a contract with the 3rd party from the moment the agent purported to enter into the contract with the third party as though the agent had been properly authorised from that moment.
but where done within a certain time limit and the agent carries it out within this time limit subsequent rat by the principal = INAFFECTIVE
N/B English law recognises ratification after a third party purported to withdraw (Bolton partners v lambert)

Question 21

forman& co pty v the Liddesdale

Answer 21

the principal in ratifying must make an informed choice

Question 22

gray v baird logistics

Answer 22

ratification may not be possible if it would cause unfair prejudice to a third party.

Question 23

frank houlgate investment company v biggart baillie llp

Answer 23

BREACH OF WARRANTY OF AUTHORITY. an agent who does not possess authority and negotiates a contract between principle and 3rd party may be liable to the THIRD party for breaching his warranty of authority. where an agent acts without authority and THIRD party has contract he did not think he had breach of warrenty is available = damages are avaliable

Question 24

stewart v shannessy

Answer 24

AGENTS ACT FOR A DISCLOSED PRINCIPAL. contract created between the principal and 3rd party though medium of agent. agent is not a party to the contract and should not incur liabilities. General principle must be considered in the light of the presumption that a party signing a written contract is BOUND.

Question 25

digby brown & co v lyall

Answer 25

methods of signature by the agent to rebut this presumption.

Question 26

brebner v henderson

Answer 26

use of descriptions such as director/ sec

Question 27

ruddy v monte marco & ors

Answer 27

there is little scots authority on AGENT ACTS OR A DISCLOSED BUT UNKNOWN PRINCIPAL. it may depend on whose in credit the third party relied upon when he entered into the contract: did the third party look at the credit of agent/ third party or credit of own unknown principal. the agent and principal are both potentially liable. but if the principal is discovered or reveals himself then THE THIRD PARTY CAN CHOOSE WHETHER TO SUE EITHER PRINCIPAL OR AGENT

Question 28

bennet v inversk paper co

Answer 28

AGENT ACTING FOR AN UNDISCLOSED PRINCIPAL. the agent may act on behalf of a principa, but this fact may be entirely concealed from the third party. the third partys persective the agent appears to be the principal. a contract is then formed and the third party considers that his or her contracting party is the agent. the real principal at a later stage may DISCLOSE EXISTANCE. following disclosure the PRINCIPAL may choose to SUE the 3RD party under contract created by agent. THIRD PARTY may also choose to sue EITHER the PRINCIPAL or AGENT

Question 29

the principal may be disclosed from intervening

Answer 29

AGENT ACTING FOR AN UNDISCLOSED PRINCIPAL. the following normal rules of interpretation of the contract the terms indicate either expressly or impliedly that there is NO concealed principal
if delectus personae is present
possibly also if concealment of the principal was intended as a description of the third party ENGLISH CASE conflicts dyster randall &sons

Question 30

af criag &co v blackader

Answer 30

ELECTION the third party must elect to sue either agent or principal. an election once made is FINAL between agent an principal NOT joint and severable

Question 31

mcmeekin v easton

Answer 31

OLD LAW!! ACTS ON BEHALF OF A NON-EXISTANT PRINCIPAL. suggested that where an agent acts for a non existant principal that agent becomes personably bound in contract with the third party in these cases the principals were unincorp associations thus lacked CONTRACTUAL CAPACITY. thus the parties intended the agent to be bound knowing that the principal could not be bound

Question 32

Halifax v dla piper llp

Answer 32

NEW LAW AGENT ACTS ON BEHALF OF NON EXISTING PRINCIPAL. in this case a sol acting on behalf of a non-existant client was found not to be personably liable given that none of the parties intended the sol to be personally bound.