B2 - Agency Introduction

Question 1

What is Agency?

Answer 1

1. “Agency is the fiduciary relationship that arises when one person (P) manifests assent to another person (A) that the A shall act on the P’s behalf and subject to the principal’s control, and the A mainfests or otherwise consents to act.” - American restatement of the law of agency.
2. “Agency is the relationship that exists between two persons when once, the A, is considered in law to represent the other, called the P, in such a way as to be able to affect the P’s legal position in respect of strangers to the relationship by the making of contracts or disposition of property.” -Fridman
3. “An agent is a person who is ‘recognised by law as having power to affect legal rights, liabilities and relationships of another person’ (the P)” - Bradgate
4. Qui facit per alium, facit per se.

Question 2

Boardman v Phipps

Answer 2

Consent not necessary. Agency can arise by apparent authority, irrespective of consent.

Question 3

Consent Theory

Answer 3

If the Pconsents to the agent acting on his behalf, the P is bound. Concentrates on internal relationship, the fiduciary relationship.
“Relationship of P and A can only be established by the consent of the P and A. They will be held to have consented if they have agreed to what amounts in law to such a relationship.” - Garnac Grain v HMF Faure
Agency is consensual, not contractual.
This theory doesn’t explain agency where it arises without consent, by operation of law (agency of necessity). Prior consent is not needed for the creation of an agency relationship.

Question 4

Qualified consent theory

Answer 4

Combines consent theory with protection of ‘misplaced reliance’. Where the P has consented for A acting for him and the 3P has relied on the appearance of consent, the law will protect the 3P if his reliance was misplaced.

Question 5

Internal aspects of agency

Answer 5

U F C RC NE C

CRUCiFy Nose

Inhalator Viceroy Noose

1. Grant by P of authority is unilateral.
2. A has fiduciary duty.
3. Commissions against services.
4. A owes duty of reasonable care
5. A’s duty not to exceed authority of strict liability
6. A retains power to control A

Question 6

Consent Theory

Answer 6

If the P consents to the agent acting on his behalf, the P is bound. Concentrates on internal relationship, the fiduciary relationship.
“Relationship of P and A can only be established by the consent of the P and A. They will be held to have consented if they have agreed to what amounts in law to such a relationship.” - Garnac Grain v HMF Faure
Agency is consensual, not contractual.
This theory doesn’t explain agency where it arises without consent, by operation of law (agency of necessity). Prior consent is not needed for the creation of an agency relationship.

Question 7

External aspects of agency

Answer 7

The apparent authority of the agent as it appears to a 3P affects the relationship between P and 3P, even if the A has no authority and may be in breach of their contract with the P in entering into the transaction with the 3P.

Question 8

Boundaries of agency

Answer 8

CA IR RT C TB
Names don’t matter

CAvIaR RaT Cat TuB
Names don’t matter

1. Internal relationship only - canvassing agent (no power to affect legal relationship, but have fiduciary duty and commission).
2. Indirect representation - only in civil law countries. A acts as A to P, but exgernally the A deals on their own account, so 3P doesn’t deal with P.
3. Use of representative terminology - “acts in the name of” has no standing in English Law.
4. Companies: agent and organ. People used to say that people act as agents of a company, but today it is agreed that the acts of the company’s representatives are the company’s acts
5. Agent and trustee/agent and bailee - Trustee holds goods for another, not normally subject to control - may or may not have powers. Bailee possesses goods ownedy by another, may have A powers. An A may hold goods on behalf of P.
6. Lack of significance of types of agents - there is no significance in law about the different types of agency.

Question 9

Examples of Types of Agents

Answer 9

1. Auctioneers
2. Directors
3. Partners
4. Solicitors and Counsel
5. Factors
6. Brokers
7. Del Credere Agents
8. Confirming Houses
9. Commission Agents