Classification, Kinds And Types Of Agents Flashcards
What are the 3 main classifications of agents?
Special agent
General agents
Universal agents
Special agents
A special agent is one who is appointed for a particular purpose, such as the performance of a particular act, or to represent his principal in some particular transaction, and such transaction not being in the ordinary course of his trade profession or business as an agent. A special agent has no authority to bind his principal in any other matter than that for which he is engaged E.g. A
appoints B to purchase a horse. The authority may even be so narrow as to limit the agent to the purchase of a particular horse at a particular price. The only authority given to B as agent is that necessary to procure the type of horse mentioned and at that price. Person who deal in him are bound to ascertain the extent of his authority.
General agent
A general agent is one who has authority:-
(i) to act for his principal in all aspect matters concerning a particular trade or business, or of a particular nature or
(ii)to do some act in the ordinary course of his, trade profession or business as an agent on behalf of his principal; e.g. where a lawyer or broker is employed as such. The scope of the authority of a general agent extends to the usual acts of such an agent in a like
position. However a general authority may extend beyond his actual instructions; i.e. it will not matter to those dealing with the agent if the principal has actually limited the agent’s authority to a narrower range of action than the ordinary scope of the business or trade in which the agent is acting, unless those dealing with the agent are notified of the limitation. If they have no such
knowledge they are entitled to assume that any act done by the agent in the ordinary scope of the business is authorized by the principal.
Universal agent
A universal agent is one where authority is unlimited, i.e. he has authority to act for his principal
in all matters without restrictions. Such types of agents are rare in practice. But when they do exist, they are appointed by extensive power of attorney. The only limits which are imposed
upon the authority of a universal agent are those of which the law imposes with regard to the
legality of the objects and the capacity of the parties in relation to contracts in general.
List the kinds of agents we have
- Mercantile Agents
- Del Credere Agents
- Auctioneers
- Attorneys or Legal Practicioners
- Shipmaster
- Confirming Houses
- Some other Commercial Marketing Agreements
Mercantile Agents definition
Section 1 Factors Act 1889
“…having in the customary course of his business as such agent authority to sell goods or consign goods for the purpose of sale, or to buy goods, or to raise money on
the security of goods.”
This definition encompasses two types of agent recognised by the common law namely, factors
and brokers.
Factor
defined by Abbott C.J. in Baring v. Corrie
“a person to whom goods are assigned for sale by a merchant residing abroad or at a
distance away from the place of sale…… He normally sells in his own name without disclosing that of his principal.”
- A factor is therefore simply an agent to whom goods are consigned for the purpose of sale.
- He has possession of the goods, authority to sell them in his own name, and a general discretion as to their sale
- The distinctive mark of a factor is possession of the goods or of documents of title to the goods.
- It follows that he has certain implied authority.
Fator’s implied authority
- He may sell the goods in his own name as though he were the principal.
- The (mercantile agent or) factor is entitled to receive
payment for the goods from the purchaser and give receipt. In this case the purchaser is
absolutely protected provided he had no notice from the principal requiring payment to him personally. - A factor has implied authority to sue on the contract in his own name and can exercise a lien over goods whilst in his possession if his expenses and commission are outstanding.
A factor or a mercantile agent is also deemed to have power to pledge the goods.
Section 2 The Factors Act 1889
“with the consent of the owner, in possession of goods or of documents of title to goods,
any sale, pledge, or other disposition of the goods, made by him when acting in the ordinary course of business as a mercantile agent, is as valid as if it were expressly authorized by the owner of the goods.”
The mercantile agent must be in possession of the goods or of the documents of title to the goods with the consent of the owner.
Where such is not the case any
disposition by the mercantile agent is not valid.
Pearson v Rose & Young Ltd
Thus persons who in good faith take the goods under such disposition, and who have not at the time notice that the agent has not the required authority to dispose of them acquire a good title to them.
However, the person taking under the disposition must act in good faith and must not have
notice that the person making the disposition has no authority to wake it.
Pearson v Rose & Young Ltd
a car was left with the agent to show to prospective purchaser,but without
instruction to sell.
The agent obtained possession of the registration book from the plaintiff by trick and sold the car to a bonafide purchaser.
It was held that the purchaser acquired no title because the agents though in possession of the car with the owner’s consent, he was in possession of the registration book without his consent.
Brokers
Brokers like a factor is a mercantile agent employed to make contracts between principal and others for a commission usually called a brokerage.
Brett L.J in Fowler v Hollins
“an agent employed to make bargains and contracts between persons in matter of trade
commerce and navigation. Properly speaking a broker is a mere negotiator between other
parties…. He himself has no possession of the goods, no power actual or legal of determining the destination of the goods, no power or authority to determine whether the goods belong to buyer or seller or either”.
Differences between Brokers and Factors
- A broker is not entrusted with the possession of the goods or merchandise in which he deal.
- He cannot sell in his own name.
- Therefore he has no authority as a broker to receive the price
- Ordinarily not being entrusted
with the goods he has no right of lien.
Del Credere Agents
A del credere agent is also a mercantile agent but the special feature of this type of agency is that the agent in return for extra commission called del credere commission promises to indemnify the principal if the 3rd party introduced by the agent fails to pay what is due under the contract.
2 things that should be noted about Del Credere Agents
- A del credere
agent is in the position of a surety to his principal for the performance of the persons the agent goes into the contract with on behalf of the principal - The obligation del credere agency is confined to answering for the failure to pay any
ascertained sums which may become due as debts.
Discuss the del credere agency surety characteristic
In other words, he undertakes to ensure that if the goods entrusted to him are sold, they will be paid for if not by the
buyer then by the del credere agent himself.
This brings the transactions very close to contracts of guarantee but the undertaking of a del credere agent is actually a contract of indemnity.
Hence it is therefore not necessary that such an agreement should be evidenced in writing as required by s.4 of the statute of frauds 1677
Such an agency can in principle even be enforced from the course of conduct between the parties. However the SC has sounded a note of caution in that regard.
Omoregie v B. Portland Cement Fabrik : in the absence of clear words or something
definite in the parties’ course of conduct a del credere agency could not easily be inferred.
What is the limitation of the del credere agent’s liability?
The obligation del credere agency is confined to answering for the failure to pay any
ascertained sums which may become due as debts. In other words liability does not extend to other breaches of the contract by the other parties e.g. where the other parties breach the contract in some other manner such as refusal to take delivery of the goods.
Thomas Gabriel & Sons v Churchill & Sim
Churchill & Sim v Goddard
In modern times what is the attitude to del credere agency?
The del credere agent would often in modern conditions involve liabilities which an ordinary commercial agent acting for a commission would be reluctant to undertake.
In more recent times more use has been made of credit guarantees and of confirming agents who accept liability not
merely for payment but for the contract being completed vis-à-vis the confirmer.
Thomas Gabriel & Sons v Churchill & Sim
This was a case where a vendor sued the del credere agent to recover the amount claimed by him under a contract as to which there were disputes between the vendor and the purchaser who refused payment on the ground that the seller did not duly perform his part of the contract.
Pickford J: The liability of the del credere agent is a Contingent pecuniary liability, not a liability to perform the contract; it is a pecuniary liability to make good in the event of the default of the buyer in respect of a pecuniary liability. It does not extend to other obligations of the contract. It does not expose the del credere agent to an action to ascertain the sum due. It is limited to a contingent pecuniary liability in respect of a sum which, as between the seller and the buyer, is an ascertained sum.
Churchill & Sim v Goddard
Churchill & Sim, acting as del credere agents, paid the invoice amount for timber shipments to an importer named Goddard.
They drew two bills of exchange on the importer, which were accepted but later disputed because the timber was rejected.
The dispute between the importer and the exporter went to arbitration, and when the bills became due, Goddard refused payment.
The Court of Appeal ultimately ruled in favour of Churchill & Sim.
The shipments arrived and on inspection were rejected by the importer.
The dispute between importer and foreign shipper went to arbitration and was still pending at the end of 4 months when the bill of exchange became due.
The defendant refused payment and plaintiff’s sued for recovery of the amount of the bills.
The court explained that if Churchill & Sim were collecting money on behalf of the Finnish exporters, any valid argument against the exporters would also work against Churchill & Sim. However, since Churchill & Sim had already paid the Finnish exporters, they had the right to collect the money from Goddard, even if Goddard had an issue with the Finnish exporters.
Auctioneers
Auctioneers are agents whose ordinary course of business is to sell goods or other property by public auction, for a reward generally in the form of a commission.
They may or may not be given possession of the goods but it is clear that when given such possession auctioneers are “mercantile agents” within the Factors Act 1889.
What are the peculiarities of auctioneers
1.They are agents for both parties to the sale which they negotiate.
- The auctioneer is primarily
the agent of the seller but after the sale has taken place he is the agent of the purchaser for the purpose of signing the memorandum of sale on behalf of the purchaser - Even though they are agent they can personally sue for the price of goods sold and delivered as auctioneer even if their commission has been paid.
Chelmsford Auction Ltd V Poole
Chelmsford Auction Ltd V Poole
- Chelmsford Auction Ltd, auctioneers, held an auction where they sold a Fiat car to Mr. Poole for £58⁽¹⁾.
- Mr. Poole paid a deposit of £7, with £3.50 going to commission and the rest to the vendor⁽²⁾.
- The remaining balance of £51 was not paid, and Mr. Poole did not take delivery of the car⁽²⁾.
- Mr. Poole later saw the car and decided it was not roadworthy, refusing to accept it. He also never received the car’s log book or keys⁽¹⁾.
- Chelmsford Auction Ltd sued Mr. Poole to recover the remaining balance⁽¹⁾.
- The lower court initially ruled that the auctioneers had no right to sue since they were not the true owners of the vehicle⁽¹⁾.
- The Court of Appeal overturned this decision, stating that the auctioneers could sue Mr. Poole as they had settled with the vendor.
Attorneys or Legal Practitioners
A legal practitioner or attorney appointed to act for another in legal matters is often referred to as “attorney at law.”
- A legal practitioner, acting under a general retainer has authority to accept service of process and appear for the client, but has no authority to commence an action unless he is specifically instructed to do so, or, such authority may be reasonably inferred from the terms of the retainership.
- Once so instructed he has an implied authority to take every step to enforce or defend the legal interest of his client.
- He can compromise an action unless expressly forbidden.
- In this connection, the client is bound by every act of his lawyer, done, in the ordinary course of
practice. - Furthermore, being an agent he has authority to receive money on behalf of his client
and cannot be made personally liable to repay to the 3rd party money so received and paid to his client. - While acting in his capacity as a legal practitioner, the attorney at law can however be liable in negligence.
- Any contract with his client relieving him of such liability is void. See Legal
Practitioner Act 1975 S. 9. - The exception is where he acted gratuitously or his negligence arises from the conduct of his client’s case in court or tribunal
Shipmasters
The shipmaster has authority to enter into contracts in matters relating to the usual employment of the ship, e.g. contract for repairs of the ship or the purchase of necessaries when he cannot communicate with the owner;
and where he can in no other way obtain money thereafter he has authority to give customary bond for such necessaries.
This would only bind the owner if given strictly for necessaries and bonafide.
