B5 - Relations Between P and A Flashcards
Heaton’s Transport v Transport Workers’ Union
Revocation by the P terminates Agency. The revocation must be communicated to the A.
Blackburn v Sholes
A fulfilling their performance terminates the A.
Dickinson v Lilwal
The expiry of a fixed period of A terminates the A.
Heyman v Darwins
Mutual agreement between P and A terminates the Agency. Repudiation by one party standing alone does not terminate the contract, it takes two to end it, by repudiation, on the one side and acceptance of the repudiation on the other.
Rhodes v Forwood
The subject matter of the agency being destroyed terminates the Agency.
Marshall v Glanvill
The operation of the doctrine of frustration where performance becomes illegal, impossible, or radically different from what was originally intended terminates the agency.
Pacific Insurance v Hazell
The death, insanity or bankrupcy of the P or A or where the P or A is a company, its winding up or dissolution.
Campanari v Woodburn
A performed his obligations after becoming aware P had died and then claimed commission. He was not awarded commission, but some quantum meruit.
Drew v Nunn
The husband became insane and the wife, his A, bought goods from 3P. After he recovered sanity, he refused to pay. He was held to be liable.
Renunciation
Renunciation by the A and accepted by the P terminates the A.
Baker Aircraft v Canadian Flight
In a unilateral termination by one party, reasonable notice must be given to the other.
Where A cannot be terminated
The A cannot be terminated by the P without A’s consent when: authority by deed or valuable consideration, POA that is irrevocable, or where the A is allowed indemnity
Frith v Frith
Where the A’s authority has been granted by deed or for valuable consideration to secure or protect any interest of the A, A cannot be terminated by P without A’s consent
Power of Attorney Act 1971
Where the A’s authority is given under a POA which is irrevocable and is given to secure a proprietary interest of, or the performance of an obligation owed to the A
Chappel v Bray
Where the A is entitled to an indemnity from the P for performance of their agency duties.
Rhodes v Forwood
A was appointed to sell coal for a fixed period of seven years. After 4 years, the P went bankrupt. The A did not succeed in his action of breach of contract, as the agency contract was subject to the risk that the P might sell the business.
Turner v Goldsmith
A was appointed for 5 years to sell the shirts of the P. After 2 years, the factory burnt down and the P closed his business. The A sued the P for breach of contract and succeeded as it was held the P could have given him something else to sell or shirts made by someone else.
Commercial Agents (Council Directive) Regulations 1993 - Minimum Notice
- Minimum notice periods - Where the parties continue their relationship after the fixed period, the agency becomes indefinite. Either party may give notice to terminate an agency contract for a fixed period. Regulation sets out minimum periods. Failure to give proper notice terminates the A but termination is wrongful. Immediate termination possible if frustration. For the contract to be discharged, the breach should be a repudiatory breach.
Crane v Sky Service
For the contract to be discharged, the breach should be a repudiatory breach.
Commercial Agents (Council Directive) Regulations 1993 - Indemnity and Compensation
- Indemnity and Compensation - After the termination of the agency, A is entitled to be indemnified or compensated for the damage. The entitlement to indemnity and compensation is not based on fault - it is the default position. The A is entitled to an indemnity if and to the extent that: (a) he has brought the P new customers or has significantly increased the volume of business with exsiting customers and the P continues to derive substantial benefits from the business with such customers; and (b) the payment of this indemnity is equitable having regard to all the circumstances and, in particular, the commission lost by the commercial agent on the business transacted with such customers. An indeminity is payable when after termination the P continues to do business with customers found by the agent. Claiming compensation is more advantageous since they can claim this even when P has ceased carrying business. Unlike compensation, there is a limit on how much indemnity can be claimed. But claiming indemnity does not stop A from claiming damages.
Moore v Piretta
The court awarded an indemnity to the A - it was said that the indeminty was to grant the A a share in the goodwill built up by their efforts. In awarding an indeminity, the court is awarding value of goodwill - it is not assessing loss, so mitigation of loss is irrelevant.
Compensation for damage caused by ending of Agency
Damage is said to occur in circumstances which: (a) deprive the agent of the commission which proper performance would have procured him whilst providing his P with substantial benefits linked to A’s activity; or (b) have not enable the agent to amortize the costs and expenses that he had incurred in the performance of the A on the advice of his P. Indemnity after termination is to take into account work done by A to establish goodwill; Compensation is to compensate the A for loss. Indemnity and compensation can be used in various cases, including death of the A or agency ending due to the fixed period expiring.
Right to compensation or indemnity is lost when:
(a) P terminates the agency for the A’s repudiatory breach, (b) A terminates the agreement (unless termination is justified based on circumstances attributable to the P or the age, infirmity or illness of the A); or (c) the A, with P’s consent, assigns the A to another.
Fryer Services v Firth Hardware
A failed to produce the weekly reports despite numerous requests and warnings from P. It was held P could terminate agency.
Lapse of indemnity or compensation
The A loses the right to compensation or indemnity if they do not inform the P of their claim within one year of the termination.
Calculation of compensation and indemnity
If the A agreement specifies the A is entitled to indemnity, this is calculated as one year’s commission. If it doesn’t state indemnity, the A is entitled to compensation.
Excluding clauses 17 and 18
The parties cannot contract out of regs 17 and 18 to the detriment of the A before the agency expire (reg 19)
Powers of Attorney Act 1971 and Mental Capacity Act 2005
Protect the A and 3P from the P’s supervening mental incapacity
Watson v King
Where the P dies, there can be no apparent authority. The personal representatives of a P who has died cannot ratify the A”s acts done on behalf of the P after their death.
Bankruptcy effect on agency
After the P is bankrupt, a 3P cannot rely on apparent authority - this is because upon bankruptcy, the P’s estate vests in the trustees, so that the P no longer has capacity to perform acts giving rise to an apparent agency.
Scarf v Jardine
A P who revokes A’s actual authority, but does not notifiy 3P of the withdrawal, is bound to 3P by the A’s apparent authority. The P giving notice of revocation to the A is insufficient to affect the apparent authority; notice must also be given to 3P.
The Hermione
Following instructions. The agent owes a duty to obey the P’s instructions, don’t have to follow illegal orders, nor those that are void under law or statute, but must obey reasonable instructions given by the P, even if the A thinks there are better things to do in the P’s best interest. A professional agent but have a duty to warn the principal of any risks in following instructions.
Turpin v Bilton
Instructions. Only has to follow instructions in contractual agreements - if A fails to follow instructions, P can sue A for breach and recover damages. Here, the A was liable for breach of contract to P as he had not insured the P’s ship in accordance with Agreement. Gratuitous agents have no duty to follow instructions, but may be liable in tort.
