Definition, Nature And Scope Flashcards
According to Robert Lowe,
Agency “it lies at the very heart of the subject and without it modern commerce would not exist.”
Yet others believe that
“commerce will literally come to a standstill if businessmen and merchants could not employ the services of factors, brokers, forwarding agents, estate agents, auctioneers and the like and were expected to do everything themselves.”
What is the purpose of agency?
The agent may possess special
skill or expertise for which he is needed
He/she may have special knowledge of a particular
market, area or commodity
The principal may need someone on the spot to negotiate a contract, particularly in a international context
The principal may simply be too busy to make every contract personally.
Fridman
“… the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position in respect of strangers to the relationship by the making of contracts or the disposition of property.”
Bowstead
“… the relationship which exist between two persons, one ofwhom expressly or
impliedly consents that the other should represent him or act on his behalf, and the other
of whom similarly consents to represent the former or so to act. The one who is to be
represented or on whose behalf the act is to be done is called the principal. The one who
is to represent or act is called the agent. Any person other than the principal and the
agent may be referred to as a 3rd party.”
American Restatement of the Law of Agency
“… the relationship which results from the manifestation of consent, by one person to
another that the other shall act on his behalf and subject to his control, and consent by the
other so to act.”
However whatever forms a definition takes; a number of characteristics of agency are usually ascertained:
(i) The agent’s capacity to affect the principal’s legal position (i.e. to say his rights and liabilities towards other people)
(ii) The definitions are based on consent (e.g. Bowstead and
Restatement).
Ofodile v Chinwuba
There is even Nigerian jurisprudence in support of this approach of consent.
Ejiwunmi J.C.A. Said:
“In the ordinary law of agency, the paradigm in which the agent and the principal agree is that one should act for the other. And the term “agency” is assigned to this basic relationship which involves the consent of both parties. It is therefore trite law that agency arises mainly from a contract or agreement between the parties express or implied.”
Niger Progress Ltd v. North East Line Corp
A disclosed principal may sue or be sued on any contract made on his behalf and in respect of any money paid or received on his behalf by his agent acting within the scope of his actual authority. Per Obaseki J.S.C at p. 20
Fogam’s definition of Agency
However, notwithstanding the difficulty in formulating a precise definition, the idea behind the
concept of agency is the recognition by the common law that a person need not always do things
that change his legal relations himself.
qui facit per alium facit per se.
(He who
acts through another act by himself).
The existence of agency relationship in the true legal sense is a matter of law
The law may hold such a
relationship to exist even when the parties did not contemplate it.
Similarly, the fact that the parties have labeled (or called) their relationship as one of agency is not conclusive. Lamb WT & Sons v Goring Brick Company.
Lamb WT and Sons v Goring Brick Company
in determining the true nature of an agency, the question often turns on whether the
agent acts for himself for a profit or account to another person (i.e. seller) in return for a
commission or remuneration of some other sort. Thus A manufacturer may contract to sell his goods only through a “sole agent”; if on the construction of the agreement, the sole agent is
actually a buyer; then the manufacturer may be in breach of the contract if he sells himself.
But if he is an agent in the strict legal sense, then the manufacturer would be entitled to sell personally as well.
Similarities between Agency and Trusts
In both cases they are part of a fiduciary relationship in that both are persons who act on behalf and for the benefit of others.
In this regard their duties are similar in that both of them must not allow their interest to conflict with their duties.
Further, in both cases they may be able a transfer a good title to a bonfide purchaser in good faith.
Again, certain equitable remedies in respect of property in the hands of an agent
may be pursued by the principal against an agent, in the same way that they are available to the beneficiary against a trustee. For ex, an agent who makes a secret profit must account for it in equity, in the same way as a trustee who makes a secret profit out of his trust.
Distinction between Agency and Trust
equitable obligation binding on a person called a trustee to deal with the property over which he has control for the benefit of other person called the beneficiary
trustee is the legal owner of property but an agent is
only authorized on behalf of the principal
Secondly, an agent represents his principal, and can create contractual relations between his principal and 3rd persons. But a trustee is not in any way the representative of his beneficiaries: hence does not involve his beneficiary in personal responsibility for the trustee’s acts, whether in contract or tort.
an agency can generally
be created between parties without any special form, but in many cases a trust must be created in
writing.
Agency and Bailment
A bailment is the delivery of personal property by one person to another for a specific purpose in the understanding the property would be returned after the special purpose is achieved
A bailee is the person who receives possession of goods from the owner for the specific purpose
a bailee is not normally an agent of the bailor.
However when exercising some of his powers over the property, e.g. to have them repaired or serviced, the bailee incidentally involves the bailor in liability on contract made for the purpose just as an agent can involve a principal.
Distinguish between bailment and agency
the bailee does not represent the bailor
the bailee has no power to make contracts on the bailors’s behalf; nor can he make the bailor liable, simply as bailor for any of his acts.
Agency, servants and independent contractors
A servant is one who, by agreement, whether gratitutiously or for reward gives his service to another.
An independent contractor on
the other hand, is one who by agreement, usually for reward provides services for another
The test then is usually given as being one of ‘control.” The servant is said to be someone who is completely subject to the control of his master as to what he does and how he does it; whereas an independent contractor is his own master, but must provide what he has contracted to provide in the way of work or services.
Differences between servants, independent contractors and agents
It has been suggested that the distinction between
servants and Independent contractors on the one hand and agents on the other is essentially one of action, in that agents are mainly employed to make contracts and to dispose of property, while servants and independent contractors are often employed for other tasks.
