Chp 4 - Law of Agency

Question 1

Define Section 135 of Contracts Act 1950

Answer 1

Agent : A person employed
to do an act for another /
represent another in
dealing with 3rd person

Principal : A person to
whom such act is done, or
who is so represented

Question 2

Who can be a principal? What Section?

Answer 2

Section 136 of CA 1950,

Who can be a principal?
(1) Above 18 years old
(2) soundmind

Question 3

Fact and Held of case Chan Yin Tee v William Jacks & Co (Malaya) Ltd)

Answer 3

Fact: The plaintiff agreed and supplier the goods to the defendants because the defendant said that he is the partner of another in a meeting. However, the defendant does not pay the payment for the goods delivered as he doesn’t know the commerce of business. The plaintiff wants to sue as defendants breach the contract for not being paid the goods.

Held: The court said the defendants was not entitled to repudiate the contract, they are liable to the contract.

(Chan responsible, coz Yong not liable since he is minor)

Question 4

Minor can become principal or agent?
What Section? What Case?

Answer 4

Section 137 of CA 1950

A minor can become an agent, not a principal but he will NOT responsible for his act. The principal will bear the risks/consequences of his act.

Case: Chan Yin Tee v William Jacks & Co (Malaya) Ltd)

Question 5

Ways of FORMATION OF AGENCY. have 4

Answer 5

(a) By express & implied appointment

(b) By ratification

(c) By necessity

(d) By estoppel

Question 6

Define by express & implied appointment. Section?

Answer 6

Section 140 of CA 1950

By express appointment
-words or by writing

By implied appointment
-By conduct/circumstances Of situation

Question 7

Evaluate Implied agent from the relationship of husband and wife

Answer 7

wife has her husband’s authority to pledge his credit for necessaries, suited to their condition, style and standard of living.

Condition: wife is cohabiting with husband

Question 8

Husband can rebut (pertahankan diri) the presumption of the implied authority of wife if

Answer 8

1. He had expressly warned his wife from pledging his credit, or
2. He had expressly warned the supplier or tradesman not to supply his wife with goods on credit, or
3. His wife was sufficiently provided with the goods of the kind in question, or
4. His wife was given a sufficient allowance for the purpose of buying goods without having to pledge her husband’s credit, or
5. The contract, though for necessaries, was unreasonable, having regard to her husband’s income at that time

Question 9

Case of Husband can rebut the implied authority.

Answer 9

Miss Gray Ltd. V Cathcart

Facts:
A wife was supplied with clothes to the value of f215 on her husband’s credit. The husband refused to pay for them. When sued by the tradesman, the husband proved that he had paid his wife f960 a year as an allowance.

Held : the husband was not liable.

Question 10

Define By ratification. Section?

Answer 10

Definition: Certification/acceptance by the principal for an act done without authority or exceeding the authority given.

Section 149 of CA 1950

(1) The agent
had exceeded
the authority OR

(2) A person had
acted without an
authority

(3) The principal
either ratify or
reject your
contract

(4) If ratify, the
principal will be
bound by the
contract

Question 11

Condition of ratification

Answer 11

(1)The act : exceeded/ without authority
(2) Must be legal act
(4) The principal must be existed

Question 12

Story of Ratification (Retrospectively)

Answer 12

1.PRINCIPAL: BUY ME A HOUSE.
PRICE NOT MORE
THAN RM250,000
(1/1/13)

2. AGENT SIGNED CONTRACT
   TO BUY A HOUSE
   FOR PRINCIPAL. PRICE IS
   RM300,000. (3/3/13)
3. Ok (31/3/13) (DATE OF RATIF.)

The principal will be bound with the contract dated 3/3/13. (Retrospectively)

Question 13

Authority of Ratification

Answer 13

Agent must not use own name
to contract
Case: Keighley Maxsted Co v Durant

Question 14

Define by Necessity. Section?

Answer 14

Section 142 of the CA 1950
An agent has authority, in an emergency, to do all such acts for the purpose of protecting his principal from loss as would be done by a person of ordinary person

Question 15

Conditions of by Necessity

Answer 15

1. There must be a real & actual emergency
   Case: Great Northern Railway v. Swaffield
2. The agent was entrusted with the principal’s property or goods.
3. is impossible for the agent to get the principal’s instruction at that time. (sec. 167) Case: Springer v. Great Western Railway Co.
4. The agent must have acted in good faith

Question 16

Effects of by Necessity

Answer 16

1. The agent will be protected from any claim from the principal.
2. The agent will be entitled to claim whatever additional cost for his effort to protect/ preserve the safety & interest of the principal.
3. A Contract exists between principal & 3rd
   party.

Question 16

Define by estoppel. Section?

Answer 16

Section 190 of the CA 1950
When an agent has, without authority, done acts to third persons on behalf of his principal, the principal is bound by those acts if he has done any act to induced the third persons to believe that those acts were done under agent’s authority.

Question 17

How Estoppel happen?

Answer 17

Scenario 1
-when the principal himself induces the
3rd party to believes that a person has an
authority to act for him as agent
:principal is liable for the contract made by the agent.

Scenario 2
* Where the agent previously had authority
to act, but that authority was terminated by
the principal without notice to 3rd party.
* principal is liable for the contract made by the agent regardless of the principal’s knowledge.

Question 18

AUTHORITY OF AN AGENT. have 2, section?

Answer 18

Section 140 of CA 1950

i Actual Authority
(a)By express appointment (word or writing)
(b) By implied appointment (conduct)
Authority implied:-
*from the express authority
given;
*from the circumstances of the
case;
*from custom or usage of trade;
and
*from the situation &vconduct of the parties.

ii Apparent Authority
-Authority not expressly given by the principal but which the law regards the agent as possessing although the principal has not consented to his exercising such authority

Question 19

Situations of Apparent Authority

Answer 19

1. Where a principal, by his words or conduct, leads a 3rd party to believe that his agent has authority to make contracts for him.
2. Where the agent previously had authority
   to act, but that authority was terminated by
   the principal without notice to 3rd party.