Chapter 4 - Law Of Agency Flashcards
What three ways can agency be created
By agreement
By ratification
By necessity
What is agency by agreement
In almost every case the agency relationship is created through an agreement between the principal and agent
this agreement will have to be a contract in its self described as a contract of agency
What way are agents normally appointed
They are normally appointed by express agreement
Even agent is appointed by express agreement in the case of a formal agreement what will the terms include
Authority and powers of the agent
Duties to be performed
Commission or other remuneration
Period of the agreement
How can an agent be appointed by implied agreement
May be implied by the conduct of the parties and the relationship between them
When is an agency appointment likely to be implied
Where one person acts on behalf of the other. Particularly if commission or some other payment is made for the work
What is agency by ratification
The relationship of principal and agent can be created retrospectively (ie after the agent has carried out the task) under the doctrine of ratification.
What conditions must be satisfied for agency by ratification to be possible
The agent doing the act must do it on the principals behalf
The principal must be the person who the agent had in mind
At the time of the ratification the principal must have full knowledge of the circumstances relevant to the act
The principal must have existed and have contractual capacity
Ratification must take place within a reasonable time
Void or illegal acts can’t be ratified
The whole contract must be ratified
What is agency by necessity
Arises when a person is entrusted with goods belonging to another and an emergency make it necessary to do something to preserve them
Only arrises where it’s impossible to obtain the owners instructions in time
What are the four main principals of an insurance agent
Giving general advice
Granting cover
Collecting premiums
Completion of the proposal form
Is it normal for agents to Complete the proposal forms on behalf of the proposer and give it to the proposer to sign
Yes
Even agent completes the proposal form on behalf of the insured and was deemed to be acting for the insured at the time what may insurers do
Avoid the Policy for breach of the pre-contactual information duty because the agents knowledge will be deemed to be known by the insured
If the Insurers avoid the policy insured may then be able to sue the agent for breach of duty
Even agent is completed proposal form on behalf of the insurer will insurers be able to avoid the policy
No because a duty of care presentation of a risk
Insurers were aware of the true facts even though the agent did not actually pass them on in and in this case insurers may have a right to sue the agent
When is an agent an agent of the proposer
When they give general advice as to the cover they require
Payment of commission
When they fill in, alter or add to the answers in a proposal form
When they complete a form on the proposers behalf
When they and the insured are in collusion to defraud the insurers
When the agent gives the insured advice about how to formulate the claim
When is an agent and agent of the insurer
When they have express and implied authority to receive and handle proposal forms
When they are instructed by insurers to ask questions and fill in the proposal forms
When they survey and describe the property on the insurers behalf
When they act without express authority
When they have express or implied authority to collect premiums
