CH4 Agency Flashcards
- Identify the role of agents, their duties and rights, and their authority to enter contracts on behalf of a principal
Agency by consent: is it express or implied?
May be express or implied
Agency by consent: should it be oral or in writing? Is there an exception?
May be oral or in writing. Except if the agent is to execute a deed on behalf of the principal - must be in writing
Agency by estoppel: what method does this fall under?
Equitable method
What does agency by estoppel mean in basic terms?
It stops you from going back on your word
When does agency by estoppel arise?
- Words/conduct of principal give IMPRESSION to 3rd party that person purporting to contract with 3rd party is agent of principal.
E.g. principal tells stationary company (3rd party) that secretary (agent) deals with stationary contracts. - The 3rd party acts on this
Principal is estopped from going back on their word!
What is the additional scenario when estoppel can be created?
When authority is withdrawn but 3rd party not told
When might agency of necessity occur?
In very limited circumstances
In an emergency where the property/interests of another person are in imminent danger
An agent who seeks to bind a principal on the grounds of an agency of necessity needs to show what?
- No way of contacting
- Pressing need for action
- Good faith
- Reasonable and prudent
- Prior contractual arrangement
What is agency by ratification?
Authority given retrospectively
In terms of agency by ratification, the principal may only ratify acts of the agent if what? 4 things ECNT
- Principal EXISTED at time of agent’s acts
- Principal had LEGAL CAPACITY to make contract, at the time the act was carried out AND at the time of ratification
- Agent NAMES/IDENTIFIES principal at time of making contract
- Ratification occurs within a reasonable TIME
Can you ratify part of a contract?
No
What else must the principal do in order for agency by ratification to be effective?
Communicate a sufficiently clear intention of ratifying, by words or conduct.
E.g. refusing to return goods purchased for them by an agent who lacked authority
What are the duties of an agent? ANOP’S PC
Accountability
No conflict of interest
Obedience
Performance (contractual obligation to perform task, unless unpaid)
Skill
Personal performance (cannot delegate)
Confidence (including after agency arrangement finishes)
What are the rights of an agent?
Indemnity (repaid expenses)
Remuneration
Lien
What are the three sources of authority for agency?
- Actual express authority (stated)
- Actual implied authority (position)
- Ostensible/Apparent authority (how it looks to others). Can arise by action or inaction
In terms of liability, if the agent had authority and was known to be an agent (i.e. everything was done correctly), what is the position of the 3rd party, the principal and the agent in terms of being sued?
3rd party: may sue and be sued by the principal
Principal: may sue and be sued
Agent: usually none EXCEPT if principal was not named
In terms of liability, if the agent had authority BUT was NOT known to be an agent, what is the position of the 3rd party, the principal and the agent in terms of being sued?
3rd party: can choose to sue EITHER principal or agent
Principal/Agent: Either principal or agent may sue on the contract (agent’s rights are subordinate to principal’s)
In terms of liability, if the agent had NO authority, what is the position of the 3rd party, the principal and the agent in terms of being sued?
3rd party: no rights against principal but may have claim against agent
Principal: no obligations
Agent: potential liability under the tort of deceit breach of warranty of authority
