Agency Flashcards
what obligations does an agent have towards the principle?
an agent has a feduciary relationship toward the principle. the agent act in the best intrests for the principle in all things they do.
an agent has the legal position to bind the parties into a contractual relationship. the agent must have authority to do this.
what happens to the agent once he has brought the principle into a contract with a third party?
the principle will then step out of the way and let the parties continue with the contract. the agent has no further liability and his job is done.
in what ways will an agent be liable toward the third party?
an agent will be liable towards the third party if the agent has went out with the instructions of the principle.
this was seen in the case of morrison v statter where the agent was tasked with buying 5 4 year old sheep however they were all three year old sheep. the principle refused to take the sheep. the agent was therefore liable for their mistake and thus, the third party could sue either the agent or the principle for breach of contract.
what happens where the principle gives vague instructions? to what extent will he bind the principle?
where the principle gives vague instructions, the agent will not be liable. this was seen in ireland v livingston where they were told to get more or less 5 tonns of potatoes and the agent got 4.5 tonns. it was held that the agent was not liable. instructions were too vague
capacity of the principle
the principle who is under age cannot ask someone who is older than them to become their aent and buy something that only the agents age can buy for example a lamborghini. moreover if a principle is classes as being insane then they cannot have capacity to enter into relationships with others.
lord advocate v chung - dead man cannot have capacity.
what are the obligations between the principle and the 3rd party?
contractual and delictual
appointment of the agent
the agent is appointed either expressly by either written or oral. or the obligation can come about through implied. this is through acts or behaviours which are implied appointment.
act of necessity
a person may become the agent for someone else if an act is needed to be done because of necessity. where by someones roof has been blown down and if they were there they would authorise the workings of repair. after this, you are entitled to re-embursment for the work that you done.
fernie v robertson
apparent agency
this is where the principle done things to make the 3rd party believe that another person is the agent. even though they have no such authority
general agency
this is where the agent has been working for the principle for a while and they are given some discression as to who they can enter into contracts with.
specific agency
this is where the principle specifies the job of the agent and is usually constrained in this appointment for the agent. this is usually a one off appointment. this was seen in morrison v statter where he was told to buy sheep but bought the wrong ones. if he strayes from any of the rules then the agent is liable. seen in ireland v livingston as well.
customary practices 3 requirements
if it is custom in the industry to do something a certain way such as buying stocks off of the stock market then the agent will be excluded from liability as seen in the cas eof black v cornelius.
there are three requirements. these are that it is nutorious (so it is well known ot be done)
it is certain (eveyone does it) and it is reasonable (everyone knows the outcome if you do it)
ratification
this is where the agent has went out with their bounds of what they are allowed to doand they do it anyway. however,the principle sees that this is a good deal and can therefore ratify the contract. this must be done in a timely mannor.
case where the agent broke their duty to the principle
gilmore v cark- put the cargo on the wrong ship and was liable for it.
an agent is to act with reasonable skill and care when carrying out the task
this is seen in the case where the £5 was to be transported by carriage but they lost it on the way. therefore the skill and care of a reasonable person is required.
if they are a member of a specific organisation then they are required to have the knowlege of that profession with them.
copland v brogan.
kepping proper accounts
the agent must keep proper accounts with him. failed to do this in taylor v logan.
act in good faith
the case of Mcferson’s trs v watt was where the solicitor did not act in good faith and sold houses to his brothers and himself.
agents rights against the principle
the agent has right to reimbursment of his cost as acting as the agent.
the agent also has rights in remuneration to get paid for the job done.
agents right over principle
agent can hild the principles property in lein until he is paid.
agent and the third party
the agent only becomes liable to the third party when the aent did not disclose that he was the agent of the principle.
where the principle is not named but says that agent is acting for a principle then if the principle is found out then they can sue the agent or the principle. ferrier v dods.
termination
if it is a contract then the relationship will end upon the time period.
if there is no time period then one party can unilateraly end the relationship
illegality
impossibility.
how can agents become agents through statute?
company act 2006 s 40
partnership act 1890 s 5.
