Creation of agencies Flashcards
Agency creation/formation (MOST COMMON WAY)
By express appointment which is the most COMMON way.
Principal appoints the agent by express agreement either in writing or orally. Normally in a contract but does not need to be
The principal gives the agent authority to do specific things on his behalf
Agency creation (2)
By ratification - where a principal approves or adopts an unauthorised act done or contract made in his name and on his behalf
IT IS THE REVERSE, (P GIVES A AUTHORITY AFTER ACT ALREADY DONE)
principal must have full material circumstances of how the unauthorised act came about before deciding to agree
NB: Principal must be in existence at the time of the act and ratification must be done within a reasonable time after the act
KELNER V BAXTER
The hotel company (principal) had not yet been incorporated (pre-incorporation) therefore not existing so the contract was not binding.
Agency creation - RARE (3)
By necessity - an agency relationship created in extraodinary or emergency circumstances in which an agent acts on the behalf of a principal without recieving authorisation from the principal
1. Agent is not able to contact the principal
2. Agent is acting bona fide = in good faith
3. It is for the principal’s benefit
4. There is a pressing need for action, eg. damage/danger/distance
GREAT NORTHERN RAILWAY v SWAFFIELD
- The emergency cirumstances gave the railway(agent) the authority to act on behalf of the principal
- Expenses for stabling an uncollected horse at railway station. A claim for 4 months of livery costs succeeded as railway had a legal duty to reasonably care for the horse in those cirumstances therefore necessary for them to incur the expenditure.
Agency creation (4)
By implication - from the nature of the principal’s business or actions and the position of the agent in regard to that action or within that business, the agent is deemed to have permission from the principal to undertake certain acts
