Business Law - Agency Flashcards
Is Agency only regulated by common law?
- Regulated by both Common Law and Legislation.
- Applies to Commercial agents only
Commercial Agents (Council Directive) Regulations 1993
- Applies to Commercial agents only
What are the 4 reasons for why we have legislation for commercial agents?
- Agency law focuses on governing the relationship between principal and agent, with the aim of protecting the principal.
- This was legislated in the UK under the Commercial Agents Regulations 1993.
- Right to renumeration and notice of termination fall under these regulations.
Focuses on protecting agents interests for the business they grow for their principals.
Regulations only apply to commercial agents - what are they?
- Only relevant to commercial agents
- Effective from 1 January 1994
- Apply to all activities of commercial agents taking place in GB
- Some regulations can be excluded others are mandatory
The agent must be self. Employed, having containing authority to negotiate, and cannot be excluded by the regulation.
What is Continuing Authority?
- Excludes one-off transactions
- All transactions can be resulting from a single contract
- Includes agents who are authorised to negotiate and conclude contracts
- Parks v Esso Petroleum Co Ltd - meaning of ‘negotiate’
PJ Pipe & Valve Co Ltd v Audco India - where the agent actually participated in discussion on price or commercial terms.
Who isn’t covered by the Regulations?
- An agent who doesn’t negotiate (no effort on their part)
- Common exclusions include an officer of a company, partners, insolvency etc
- Parks v Esso Petroleum - licensee who operated a petrol station on behalf of a company
Persons whose activity as a commercial agent is secondary
So, who are the secondaries within the Regulations?
- Paragraph 2 sets out when the commercial agent’s activity will be primary
- Paragraph 2 list indicators that the agents activity s primary
Paragraph 4 lists indicators suggesting the agents activity is secondary
- Paragraph 2 list indicators that the agents activity s primary
What are the 6 steps to think about the agents?
- How is the agency relationship created?
- What authority fo the agent have - are the acting outside of their authority
- Has the agent acted outside of their authority
- What right and duties do the agent and principal have
- Has anyone breached their duties?
Does the above give rise to any liabilities?
What are the 6 types of Agency forming relationships?
- Express - clearly appointed
- Implied - by circumstance or actions
- Holding Out - Principal gives the agent the appearance of being their agent and it is the principal who makes it look this way to the third party
- Agent of Necessity - IE: Property at risk - China Pacific SA v Food Corp of India [1982]
- Ratification - Retrospective approval of an agents act by the principal
Operation of Law - The law states that partners are agents of each other or that directors are agents of a company.
What is the agency of necessity, ratification and operation of law?
- AON arises when there is a need to safeguard the property or interest of another
- Allows one person to bind another without the authority of that other in order to protect their interest of property.
- It is not reasonable for the agent to communicate with P
Agents actions were reasonable and prudent and the agent acted in bonafide interest of principal, and they were competent at the time.
Difference between Agent of Necessity (Eng) and Doctrine of Negotorium Gestio (Scot)?
- One is Scottish and the other is English
- Scots is borrowed from Roman Law and is not an Anglo common law concept
A person who usefully and benevolently intervenes in the affair of others.
- Scots is borrowed from Roman Law and is not an Anglo common law concept
Describe the Test and the English Agent of Necessity?
- Actions of the agent must be necessary for the benefit of the principal. Test is objective meaning that it doesn’t matter whether the agent honestly believed that his actions where necessary.
- It is not reasonably practicable for the agent to communicate with the principal
- Agents actions where reasonable and prudent, and that the agent acted in the interest
Principal was competent.
Describe and explain the Scottish Doctrine of Negotorium Gestio?
- A person who benevolently intervenes in the affairs of another
- Who is absent or incapable at the time of intervention
- With the intention to benefit the dominos
Gesture agent will be entitled to be relieved of liability?
What is ratification and how does it work?
Ratification is when an agent acts outside of the principals authority, but the principal approves the act retrospectively.
What are the 7 rules of ratification?
- Principal must make decision to ratify - express or implied by their actions.
- Principal must have had legal capacity at the time of the act which was ratified and also at the time of ratification.
- Principal must have had capacity at the time of the act, they must have existed at the time of the act.
- Agent must have purported to act for a principal.
- Principal must be aware of all material facts and must make an informed choice
- The ratification must take place within any time limit fixed by the parties, or within a reasonable time.
Contract that the principal seeks to ratify must be void or illegal.
Rule has developed to include the principal cannot ratify it would unfairly prejudice the right’s of 3rd parties. What are the different case in English/Scottish Law?
Rule has developed to include the principal cannot ratify it would unfairly prejudice the right’s of 3rd parties. What are the different case in English/Scottish Law?
