Chapter 4 - Agency Flashcards
Agency Law
Describes the relationship which exists where one party, the agent, acts on behalf of another, the principal.
Agency by consent
Consent may be express or implied either orally or in writing.
Agency by estoppel
Agency by estoppel arises when:
- The principal gives a third party the impression that the person that the third party is an agent
Agency of necessity
Arises where a person is faced with an emergency in which interests of another person are in imminent jeopardy
Agency by ratification
Ratification validates past acts of the agent to create an agency relationship, as if the agency were authorised to act from the beginning
Duties of an agent - Accountability
An agent must provide full information to the principal of his agency transactions and account to him for all the monies arising from them e.g bribes
Duties of an agent - No conflict of interest
The agent owes to his principal a duty not to put himself in situation where his own interests conflict with those of the principal
Duties of an agent - Performance
The agent agrees to act as agent for reward has a contractual obligation to perform his agreed task.
Duties of an agent - Obedience
The agent must act strict in accordance with his principal’s instructions.
Duties of an agent - Skill
An agent undertakes to maintain the standard of skill and care to be expected of a person in his profession
Duties of an agent - Personal performance
The agent is usually selected because of his personal qualities and owes a duty to perform his tasks himself and not delegate
Duties of an agent - Confidence
The agent must keep in confidence what he knows of his principal’s affairs even after the agency relationship has ceased
Rights of an agent - Indemnity
The agent is entitled to be repaid his expenses, provided his acts are done properly within the limits of his authority
Rights of an agent - Remuneration
The agent is also entitled to be paid any agreed remuneration
Rights of an agent - Lien
The agent has the right to exercise a lien over property owned by the principal e.g right to retain goods pending payment of sums owed to him
Authority of the agent - Actual express authority
- Expressly given by the principal in respect of a particular contract
Authority of the agent - Actual implied authority
- Authority to do all things usual or incidental to an express authority, employment or office
Authority of an agent - Ostensible authority
- Authority is created by the principal either expressly or inaction
- Is often wider than actual authority
Liability of the parties - Agent has authority and was known to be an agent
- Third Party: May sue and be sue by the principal
-Principal: May sue and be sued
- Agent: Usually none
Liability of the parties - Agent had authority but is not known to be an agent
-Third Party: Can choose to sue either principal or agent
-Principal and Agent: Either the principal or agent may sue on the contract
Liability of the parties - Agent had no authority
-Third Party: No rights against principal but may have claim against the agent
-Principal: No obligations
-Agent: Potential liability under the tort of deceit breach of warranty of authority
