Agency Flashcards
Copland v Brogan (1916)
a school teacher had asked a taxi driver to go to the bank in a nearby town in order to cash three cheques at the bank. The taxi driver had carried out various tasks for the teacher in the past and was not expecting to be paid for carrying out this favour. After cashing the cheques at the bank, the taxi driver lost the teacher’s money. There was no question of dishonesty on the taxi driver’s part. the teacher sued on the ground of the taxi driver’s negligence. The taxi driver’s defence was, that he was acting on an unpaid basis.
HELD: (by the Inner House of the Court of Session) A mandatory must take the same sort of care that would be expected of him in the management if his own affairs. He had not taken reasonable care of the teacher’s money. - He was liable for the loss.
Tinnevelly Sugar Refining Co v Mirrlees, Watson & Yaryan Co Ltd (1894)
Darley & Butler claimed to be acting on behalf of a company called Tinnevelly. They entered into a contract with Mirrlees to purchase new machinery for Tinnevelly. At the time D&B entered the contact with Mirrlees, Tinnevelly did not exist (had not yet been registered as a company, was not recognised as a legal person). The machinery later broke down and Tinnevelly sued Mirrlees for breach of contract.
HELD: Tinnevelly was not a party to the contact with Mirrlees because D&B could not have been acting as agents for a principal that did not yet exist. - It is not possible to act as an agent for a non-existing principal.
Hayman v American Cotton Oil Co (1907)
ACOC advertised that McNairn (McN) is agent (they also sent out letters to customers). Ferguson Shaw and Sons (FSS) bought goods from MCN and paid for them before delivery. McN becomes insolvent and creditors attempted to claim the goods FSS had bought. FSS turned ACOC demanding that it honour the contract that McN had negotiated on its behalf. ACOC denies that McN had ever been its agent. FSS sues ACOC.
HELD: ACOC by placing advertisements had given the impression to third parties dealing with McN that McN was its agent. ACOC needs to compensate FSS.
Kelner v Baxter (1866)
K sold wine to B who claimed to be an agent for a company that had not yet been registered. The wine was consumed but no payment made.
HELD: B was personally liable to K for payment since a principal who does not exist at the time the contract was made not later ratify it. (principal exists!)
Keighley Maxstead & Co v Durant (1901)
Roberts is an agent (authorised to buy wheat for Keighley) who trades with Durant but does not disclose agency agreement with Keighley. Subsequently Keighley (because the price was higher than originally authorised) refuses to take delivery and Durant sues Keighley for damages.
HELD: Roberts had not told Durant that he was working for Keighley. - No agency exists as principal not disclosed. Durant should sue Roberts, not Keighley (identifiable principal)
Couturier v Hastie (1856)
Cargo aboard ship begins to rot. Captain lands at nearest port and sell cargo in order to prevent the cargo from being written off completely. Cargo owner sues the captain for full price.
HELD: the captain of the ship was acting as an agent necessity in an emergency situation in order to prevent further losses to his principal. He couldn’t contact the principal for further instructions. - Agency existed by necessity and no further recovery of sales proceeds was possible.
SACHS c Miklos (1948)
the defendant agreed in 1941 to store some of the claimant’s furniture without charge. By 1944 the defendant had lost touch with the claimant and letters written to his last known address were returned. In order to gain some space, the defendant sold the claimant’s furniture. When the claimant later returned, he sued and the defendant claimed an agency for necessity has arisen.
HELD: There was no agency of necessities no emergency has arisen when the furniture had been sold. It was not as though the house that the furniture was stored in had been destroyed and the furniture left exposed to thieves and the weather. The house was available for storage of furniture.
Ireland v Livingston (1872)
Principal contracts agent to buy 500 tonnes of sugar (and up to 50 tonnes over). Agent ships 400 tones sugar and fully intends to ship the remaining goods in another ship. The principal refuses to accept 1st delivery.
HELD: The agent had carried out the principal’s order in good faith and had acted within express actual authority therefore principal was bound to accept delivery.
Hely-Hutchinson v Brayhead Ltd (1968)
Chairman of the BOD & chief executive of B Ltd acts as the company’s managing director even though he has not been officially appointed. He entered into a variety of transactions on behalf of the company, one of which the company refused to fulfil.
HELD: Although the director derived no authority from his position as chairman of the board (no express, actual authority), he did acquire such authority from his position as chief executive and thus the company was bound by the contract he had entered into on its behalf.
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd
The BoD of Buckhurst allowed one of its members to act as the managing director without him being formally appointed as such. This director entered into various contracts with third parties on the company’s behalf. On one occasion, the director appointed a firm of architects. The architects asked to be paid by the company.
HELD: The director did not have actual authority to act on the company’s behalf when he entered the contracts with the architects. He was acting within his obtensible authority and the architects had a good reason to believe that he had the necessary authority to bind the company.
Santa Carina (1977)
Defenders were known agents but for an unnamed principal. Pursuers supplied ship bunkers on instructions of the defenders but they were never paid for. The pursuers sued the defenders for breach of contract. The defenders claimed that they were acting as agents and the pursuers were perfectly aware of this situation.
HELD: The principal was a disclosed principal and therefore pursuers should not sue agent they should have sued the principal
Stewart V Shannessy (1900)
Shannessy acted as an agent for a company and decided to employ Stewart on behalf. When letter of employment was signed by Shannessy he did not make agency explicit and it looked as if he was employing Stewart personally (e.g. instruction & payment from Shannessy). He later dismissed Stewart who then sued for arrears of pay.
HELD: Shannessy was personally liable to Stewart since he had signed the letter and had not given any indication that he was acting as an agent for the company.
Dudley v Barnet (1937)
The agent had been given the task of finding a suitable tenant for the principal’s premises. The agent recommends a letting tenant but principal refuses and accepts third party’s offer. He refuses to pay the agent on the basis he did not benefit from his advice. The agent sued for payment.
HELD: Principal is liable to the agent for the commission.
Kennedy v Glass (1890)
Stevenson & Sons v Duncan (1842)
Principal refuses to honour a contract negotiated on his behalf by agent. Agent has acted within both actual and ostensible authority. Third party sues agent for damages for breach of warranty authority. In return, the agent then sues principal.
HELD: Agent is entitled to be indemnified or compensated for the losses he experienced as a result of the principal’s failure to honour the agreement with the third party.
Sibbald v Gibson (1852)
Sibbald engages Gibson as an agent to sell corn. A dispute arises over the amount of commission due but the matter remains unsolved. S transfers corn to G to be sold but G holds back an amount to cover the disputed commission.
HELD: The agents were within their rights to withhold the commission that was due to them from earlier dealings. - If principal breaches agency agreement then he agent is entitled to a lien over his property.
