Law Of Agency Flashcards
How is an agency created? (3)
By Agreement (express or implied)
By ratification
By neccessity
How is an agency by agreement brought about?
Express agreement -
Can be formal in writing
Can be informal (oral)
Implied agreement -
By conduct of the parties
(means no express authority only implied authority)
How is an agency by ratification brought about?
This is created retrospectivly after the agent has carried out their task
(Only validates past acts, not future)
How is an agency by neccessity brought about?
When a person is entrusted with goods, if in an emergency occurs and it is neccessary to do something to preserve the goods.
Only applies where it was impossible to contact the owner for verification
What are the duties of an agent? (5)
Obey instructions Exercise proper care & skill Perform duties personally Act in good faith towards the Principle Account for monies recieved on behalf of the Principle
What rights does the Agent have? (3)
Remuneration
Indemnity - for any reasonable expenses
Lien
What can the Principle do if Agent commits a breach of their duty? (6)
- Sue the agent for damages
- Sue in Tort - for return of property
- Dismiss the agent if its a serious breach
- Sue the agent to recover bribes taken
- Rescind any contracts formed fraudulently
- Sue for account if full financial details are not disclosed
Is the Principle liable for their Agents deeds?
Yes
Is what is known by an Agent presumed to be known by the Principle?
Yes
What is express actual authority?
Instructions given to the agent
What is implied authority?
Agents have implied authority to do anything which is incidental to or neccessary for the carrying out of their express instructions
Also known as usual authority
What is apparent authority?
3rd party doesnt know limits of agents authority, therefore they rely on what appears to be the authority of the agent.
The Principle is bound by the Agents apparent authority
The Principle must hold the Agent out as entitled to act on their behalf
How does Apparent authority arise? (3)
Where the Agent has restricted authority
Where the Agent has never been appointed
Where the Agency has been terminated
(Agent can be sued here by 3rd party)
When the contract is formed with a disclosed principle, what happens the Agent?
The Agent drops out
Principle & 3rd party can enforce the contract or sue each other
Agent cannot sue or be sued
What happens if a contract is made with an undisclosed Principle? i.e. 3rd party is unaware they are dealing with an Agent
The Principle can enforce the contract
The 3rd party has the ‘right of election’ i.e. can enforce the contract or sue the Principle or the Agent but not both
How is an Agency terminated? (9)
By agreement By performance Lapse of time Withdrawal of authority Renunciation by agent (Both could be breach of contract & be liable for damages) Death of either party Bankruptcy of Principle Insanity of either Frustration
Whst is Frustration of a contract?
Where it is impossible, illegal or futile to carry out duties
Who does an Insurance Agent act on behalf of in non consumer insurance?
Uniquely for both paties - insurer & proposer
Who does an Insurance Agent act on behalf of in consumer insurance?
The consumer
Unless -
The agent collects info from consumer under express authority of insurer
The agent enters into the contract as the insurers agent
The agent does something in their capacity as the AR of the insurer
What is an Agent?
A person who has authority or power to act on behalf of another person, known as the Principle
What is an Agents task?
Usually to bring about a contract between their Principle and a 3rd party
What extras do Insurance Intermediaries do?
Provide general advice on risk mangement and loss prevention
Assist in negotiating claims
What happens in non consumer insurance if the Agent fails to pass on important info about the risk to the Insurance company?
The insurers can avoid the policy for non disclosure.
The proposer can then be left with an uninsured loss.
What type of contract is used if the Agent receives no commission, fee or other payment?
A legal contract
A contract of agency if they are paid