Agency Law Flashcards
What is meant by Agency?
This is a relationship where one party acts for another.
What are the different parties called
Principle - Individual or entity that wants a task performed, engages someone else to do this on their behalf.
Agent - The individual engaged by the principle to do something on their behalf.
Third party - individual the agent contracts with on the behalf of the principle.
How is agency created?
once of four ways: By Agreement - either express or implied By Estoppel From Necessity By Ratification
How does agency by agreement work?
Express - the principle appoints the agent, either verbally or in writing, Where the agent has power of attorney appoint must be by deed.
Implied - Agents appointment has not been expressly agreed, instead is implied from conduct or relationship.
How does Agency by Estoppel work?
Arises where principle implies there is agency relationship, cannot then deny agents authority.
Can Arise:
Where termination of an agents authority is not advised to third parties.
Where the agent is allowed by the principle to appear to have more authority.
Created by:
Express or implied representation by the principle to a 3rd party who relies upon that representation.
How does agency by necessity work?
If the following requirements are met:
There is an emergency situation
It is not possible for the agent to communicate with the principle.
The agent is acting on good faith in the best interests of the principle.
How does agency by Ratification work?
Where an agent exceeds their authority, principle has no liability, unless the contract is ratified.
The contract can be ratified by:
The principle being in existence at the time of the agreement.
The principle has the legal capacity to make the contract
The agent at the time of the contract identified the principle.
The principle is made aware of all terms of the contract.
To ratify the contract the principle must:
Ratify the whole contract, within reasonable time.
And communicate a sufficiently clear intention to ratify the contract.
What is meant by Agents authority?
This is the powers the agent has on behalf of the principle.
Where an agent exceeds their authority the principle may still be liable to the third party but may also have rights against the agent for breech of contract.
Authority can be given in several ways.
How can authority be given to an agent?
Actual Express - Authority is stated expressly, specifically and explicitly by the principle to the agent.
Actual Implied - A number of factors will affect if there is implied authority
Behaviour which is customary or usual in the circumstances.
Past conduct/authority.
Apparent/Ostensible - Where the principle by words or acts holds out to another party that the agent has authority to act on his behalf.
What is Breech of Warranty of Authority?
If the principle does not ratify a contract the agent will be liable to the third party for breech of warranty of authority.
What are the liabilities and duties with a contract under agency?
An agent may enter in to a contract which is binding upon the third party and the principle.
The circumstance of this will differ depending on whether the principle is disclosed or undisclosed.
Disclosed Principle
The 3rd party is award that the agent is acting on behalf of a principle, 3rd party can sue the principle unless:
Agent indicates their intention to be personally liable
Agent won’t name the principle
Principle is made up.
Undisclosed principle
3rd party believes they are contracting with the agent on their own behalf.
3rd party can sue the agent or the principle if later discovered.
What is an agents fidicury duty to the principle?
Avoid conflicts of interest
Act in the principles best interest
Not make a secret profit
Account for monies received.
What remedies are there for breech by the agent?
Repudiate contract with third party
Dismiss the agent
Refuse/withhold monies from agent
Recover monies paid to agent - secrecy profit/bribes
