Cession and agency

Question 1

Agency requirements

Answer 1

1) Agent must intend to act on behalf of another person (the principal)
2) Third party must intend to contract with the principal
3) The principal must exist when the contract is concluded.
4) The agent must be able to perform the act on behalf of the principal.

Question 2

Sources of Authority

Answer 2

1. Authorised by principal
   Here authorisation is a unilateral act by which one person gives another the power to act on their behalf
   - Authority may be given expressly/tacitly
   - Scope of authority depends on the intention of the principal
   - Can be general power of attorney or aimed at a specific transaction
2. On grounds of their position/office
   -Automatic - not given

Question 3

Termination of authority:

Answer 3

1. Where authority depends on a certain position
   - Terminated when the agent leaves the position
2. Authority was given for a specific purpose
   - Terminated if the purpose is achieved
3. Authority given for a particular time
   - Terminated when the time has passed.
4. Death of the principal/loss of capacity

Question 4

Liability of principal- NO authority given

Answer 4

Ratification:
1) Principal must have existed when the contract was concluded
2) Ratification must take place within a reasonable time
3) 3rd party can give notice to the principal (that he will no longer be bound) to avoid ratification

Estoppel:
1) Impression created by the principal that the person who concluded the contract had the necessary authority to do so.
2) Causality - 3rd party must have acted on such an impression
3) Fault - negligence/fraud: There must be
fault on the side of the principal
4) The 3rd party must have acted to his detriment

Question 5

Liability of agent- NO authority given

Answer 5

1. Breach of warranty if agent guaranteed his authority:
   Sometimes an agent will guarantee his authority.
   The guarantee will be a separate contract.
   Damages can be claimed if the authority does not exist.
   This contract can be implied or express
2. Implied warranty of authority
   1) Agent must represent that he has authority
   2) There must be a lack of authority
   3) 3rd party must suffer loss
   4) Causal link between the loss and representation
   [Sometimes it is said that fault is a requirement, but it seems that this is not correct]

Question 6

Doctrine of undisclosed principal

Answer 6

The undisclosed principal doctrine is anomalous in the common law. The doctrine enables a principal to sue and be sued on a contract made by his or her agent with a third party who did not know the principal existed.
Requirements:
1) Agent acts in his own name but in the interest of somebody else.
2) The undisclosed principal must authorise the agent to act on his behalf or must at least give the agent a mandate to act on their behalf

Effects:
1) It gives the undisclosed principal the right to step into the shoes of the agent.
2) Even where the undisclosed principal steps in, he only obtains rights but no obligations
3) 3rd party can choose whether to hold the agent or the principal liable - decision is final