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.
Midland Bank v Hett
Care and Skill. Contractual agent owes duty to P to exercise reasonable care and skill - this obligation may be both contractual and tortious.
Solomon v Barker
Care and Skill. Broker was liable for not obtaining the best price for the P. A greater degree of care and skill is owed by an A who is paid more for their special skill
Chaudry v Prabhakar
Care and skill. Gratuitous agent owes same duty and standard of care as contractual agent.
Ireland v Livingstone
Instructions. A is bound to carry out the instructions in agreement with the P and is liable for damages for losses if breach. If the instructions are vague, the A is entitle to give a reasonable interpretation to them.
European Asian Bank v Sind Bank
Instructions. If the instructions are unclear, the A should seek clarification from the P.
Aberdeen Railway v Blaikie Bros
Conflict of Interest. A should ensure that their personal interests don’t conflict with those of the principal.
Boardman v Phipps.
Conflict of interest. Secret Profit. The prohibition on conflict of interest applies even where there is a ‘real possibility of conflict,’ whether or not the A has acted in good faith and produced a benefit for the P - that’s irrelevant. When a secret profit is made, the A is in breach of duty of good faith and the profit can be recovered by the P.
Armstrong v Jackson
Conflict of interest. An agent appointed to buy property for the P must not sell their own property.
McPherson v Watt
Conflict of interest. Corollary to Armstrong v Jackson - if the P has appointed A to sell property, A must not buy it for themselves or close relatives.
Gibson v Jeyes
Conflict of interest. If the A sells their own property or buys the P’s property, they must show that the price was fair and that they did not abuse their position.
Bentley v Craven
Conflict of interest. Where an A acts in breach of duty, the principal may either rescind the contract or affirm it and claim an account of profit made by the A
North and South Trust v Berkley
Conflict of interest. If the A has disclosed all material facts to the P, and the P consents, the A is not in breach of contract regarding a conflict of interest.
Kelly v Cooper
Conflict of interest. The no conflict rule can be excluded by express or implied agreement between P and A.
Hippisley v Knee Bros
No secret profit. The A was entitled to be paid expenses by the P, but did not disclose the discounts he had received. Held he couldn’t keep the discounts.
Exceptions to secret profit
If the A discloses the relevant info to the P who consents to A keeping profit, then A is entitled to keep it. The reason for no secret profit is to deter A from abusing their position.
Bristol v Mathew
Fiduciary. The A owes equitable duties to the P - obligation of loyalty. The P is entitle to the single-minded loyalty of the fiducatiry. Good faith, no profit, no conflict of interest, can’t act in his interest or 3P’s without informed consent. Fiduciary duties are based on trust and not on the agency agreement.
Parker v McKenna
No man can in this Court, acting as an A, be allowed to put himself into a position in which his interest and his duty will be in conflict. Even gratuitous A has fiduciary duty - it comes from equity and not from Contract.
Industries and General Mortgage Corp v Lewis
Bribe. 1. Payment made to the A of the of the P. 2. Makes the payment knowing that A is an A to P. 3. 3P doesn’t tell P that he has made a payment to A.
Anangel v Ishikawajima
Bribe. Consists of a commission or other inducement which is given by a 3P to an A and which is secret from P. Can be classified as a bribe even it didn’t induce the contract.
Andrews v Ramsay
Bribe. If an A accepts a bribe the P can sue the A in tort for deceit and recover the bribe. A who receives a bribe is not entitled to commicssion. May be subject to criminal proceedings under Bribery Act 2010.
Bulfield v Fournier
Bribe. A who took bribe can be dismissed without notice.
Logicrose v Southend FC
P can rescind the contract with the 3P who has paid the bribe.
Lupton v White
Duty to account. Agent has a duty to account to P all money and goods received from P or from 3P on P’s behalf. They should keep it separate from their own money or P may be entitled to entire mixed fund. If the money is used in business, then they should treat the goods as a debt, and not as a trust.
Pearse v Green
Duty to Account. The A has to deliver full set of accounts, with all transactions, and must be ready to produce them whenever P requires them.
Gray v Haig
Duty to Account. If A doesn’t produce accounts, there is a presumption against them.
Yasuda v Orion
Duty to Account. The duty to keep accurate accounts arises from fiduciary relationship so duty survives upon termination.
Lees v Nuttall
Duty to account. Where A is appointed to buy property for the P and buys it in their own name, they hold the property in trust for the P.
Gibbon v Pease
Duty to account. Subject to the right of lien of the A, the A must hand over the principal’s documents to him.
Non-delegation of authority
Delegation. Unless the P expressly or impliedly consents, the A cannot delegate their authority to another person, or appoint sub-agent to perform some of their duties. The rule applies when P has trust and confidence in the A and where personal skill is relied on. Ministerial acts not involving confidence or discretion can be delegated.
Schmaling v Thomlinson
Delegation. P is not bound by an unauthorised delegation and need not pay sub-agent
Solly v Rathbone
Delegation. sub-agent has no lien against P
Catlin v Bell
Delegation. A will be liable to P for wrongful execution of duty.
National Employers v Elphinstone
Delegation. A may be liable for money received by the sub-agent
P bound by sub-A to 3P
Delegation. Where the A has apparent authority to delegate to a sub-agent, P is bound by sub-agent’s act in so far as 3P is concerned. P who ratifies is bound. If the sub-A has been negligent, A is liable to the P, whether or not delegation was authorized.
Way v Latilla
Right to remuneration. The agreement between P and A may state remuneration expressly. If not stated, it is implied that a reasonable amount is payable.
Kofi v Strauss
Right to remuneration. Term cannot be implied into the contract if it is contrary to the express terms of the contract.
Elliot v UK Land
Right to remuneration. An A who performs outside the agency contract may be able to make a restitutionary claim for a reasonable sum, provided P accepted the service.
Luxor v Cooper
Right to remuneration.A P is free to prevent the A from earning a commissions, where the agent is not entitle to commission unless the P completes the sale with the buyer.
Alpha Trading v Dunnshaw
Right to remuneration.Once P enters into a contract with 3P, if the P wilfully breaks the contract, the A is still entitled to the commission.
Mason v Clifton
Right to remuneration. A loses right to remuneration if they step outside the scope of their actual authority.
Josephs v Pebrer
Right to remuneration. A loses right to remuneration if he acts unlawfully
Kelly v Cooper
Right to remuneration. A loses right to remuneration if he acts dishonestly
Boston Deep Sea v Ansell
Right to remuneration. A loses right to remuneration if he commits a serious breach of duty.
Crocker v Lang
Right to remuneration. A not entitled to commission on transactions taking place after they have ceased to be an agent
Turner v Goldsmith
Right to remuneration. Even if the A is not entitled to commission, they may be entitled to compensation. Here, not entitled to commission after the P’s factory burned down. However, able to recover amount he would have earned during the period of A.
Right to reimbursement and indemnity
Right to reimbursement and indemnity. If the A has incurred expenses or liabilities on behalf of P, A is entitled to be reimbursed. This is either contractual or restitutionary (if there is no C). In a contractual agency, reimbursement and indemnity depend on the express and implied terms. P is liable for debt paid by the A, and for payments which the A is legally or morally bound to make in the course of carrying out the agency. Estate agents cannot claim reimbursement for the expenses of advertising, unless agreed in the contract.
Barron v Fitzgerald
Right to reimbursement and indemnity. No right to it if they exceed their actual authority, unless the P ratifies
Lage v Siemens
Right to reimbursement and indemnity. A not entitled if they are in breach of duty, are negligent, have defaulted or are insolvent.
Right to a lien
A is entitled to a lien over P’s property until the A is paid. General (allowed to hold the property until fully paid) v Particular Lien (retain possession of particular property until a debt in respect of that property is paid). For lien to be available, A must be in possession of the goods, they must have been acquired lawfully, acquired while he was an A, the agreement must not exclude liens either expressly or implicitly. The right to lien will be lot once the principal pays the monies owed or where the A waives their right of lien or if they part with the property.
Solly v Rathbone
Lien. A sub-agent can also exercise right to lien over the P’s goods against payments due to them by the A, provided their appointment has been authorized by the P.
