Preliminary issues relating to agency power

Question 1

What are the preliminary issues relating to agency power?

Answer 1

1. Capacity
2. Legality
3. Possibility of performance
4. Formalities

Question 2

What is the general rule regarding capacity?

Answer 2

Because an empowered agent is not party to a contract, their contractual capacity is irrelevant unless the agent cannot appreciate what they are doing at all.

Question 3

What is the exception to the general rule regarding capacity?

Answer 3

Contractual capacity of the agent is relevant if the agency power arises out of a contract between the principal and agent.

Question 4

What is the general rule regarding legality?

Answer 4

1. An agent may be appointed to do anything which a principal may do, unless performance by a principal is required
2. The service which the agent is appointed to perform must comply with the general requirements of legality and public policy

Question 5

What is the general rule regarding the possibility of performance?

Answer 5

The act which the agent is empowered to fulfil must be possible of performance and not objectively absolutely impossible.

Question 6

What is the general rule regarding formalities?

Answer 6

Power to act may be granted informally.

Question 7

What are the circumstances where written authority will be required?

Answer 7

Where the power relates to the sale of land.

Question 8

What is the statutory provision dealing with agency power relating to the sale of land?

Answer 8

Section 2(1) of the ALA.

Question 9

What does section 2(1) of the ALA hold?

Answer 9

No alienation of land after commencement of this section shall, subject to the provisions of section 28, be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority.

Question 10

How clearly must the agent be identified?

Answer 10

The identity of the agent must be certain, or readily ascertainable.

Question 11

What is the nature of the written authority?

Answer 11

1. Grant of authority must be in writing
2. Writing must be authenticated as that of the principal
3. Agent must be aware that the written authority exists.

Question 12

What if the principal prepares and signs the authorisation and then telephones the agent and says, “I’ve signed your letter- go ahead”?

Answer 12

According to Sugden v Beaconhurst that will suffice.