The Creation of Agency Flashcards
What are the facts of Robert Barry and Co v Doyle?
Court of Session Outer House case. There was a dispute between an estate agent specialising in hotels and the formal owner of a hotel. The estate agent claimed there was a verbal contract between them and the formal owners that said that for a fee the estate agent would introduce the owners to potential buyers of the hotel. The estate agents also argued that their standard terms and conditions had been incorporated into the contract by two letters written prior to the agreement and by an engagement letter. The previous owners argued that they were introduced to the subsidiary of the company which bought the hotel by different advisors. This case shows that there is no set process required for the creation of agency.
A manager of a hydropathic establishment barricaded a lady guest in a room with the intention of solving a dispute between her and other guests. The defendant company argued that because the manager was not acting within the scope of his employment that the principal was not liable. The court held that although the manager was not directed to barricade the woman in the room, it was implied that the manager was an agent of his employer and so the principal was liable to the third party,
What case is being described here?
Mackenzie v Cluny Hill Hydropathic.
What are the facts of Panorama Developments Ltd v Fidelis Furnishing Ltd?
The plaintiffs ran a car hire business. The defendant company employed a secretary called Bayne and Bayne hired cars from the plaintiffs for the defendant’s business. The plaintiffs sent hiring agreements naming Bayne as the hirer. Bayne then used the cars for himself and the hire charges were never paid. When the plaintiffs sued for the outstanding charges the defendant’s denied liability. The court said that the forms of hiring agreement had to be looked at along with correspondence but that these did not replace the contract that was made by Bayne on behalf of the defendants. It was held that Bayne had ostensible authority to enter into contracts and so the defendants must pay.
What area of the law of agency does Panorama Developments Ltd v Fidelis Furnishing Ltd illustrate?
The authority of an agent.
What are the facts of Tinnevelly Sugar Refining Co Ltd v Mirrlees Watson and Yaryan Co Ltd?
What type of creation does this case illustrate?
Two men bought machinery from Mirrlees Watson, saying that they were acting on behalf of the Tinnevelly company. The company was not formed until two weeks later. The machinery supplied turned out to be defective and the Tinnevelly company (which had now been registered) attempted to sue on the basis of the defects. It was held that Tinnevelly had no rights under the original “contract” because it was not a party to the contract and so could not ratify the actions of the two agents.
This case illustrates creation by ratification - when the principal ratifies actions taken by an “agent” after the actions have already been taken.
In this case the principal instructed the agent not to renew the company’s property insurance. The agent, in breach of this instruction, was in contact with the insurance company and forms were sent out by the insurance firm to the company. When the insurance firm sent out the details and the insurance premium was waiting to be paid, the factory burnt down. The court said that although the principal had the capacity to ratify the agent’s actions, this could not be done as the contract of insurance had to be entered into before the loss. The ratification was invalid.
Which case is discussed above?
Grover Limited v Matthews.
What area of the law does Grover Limited v Matthew illustrate?
The authority of the agent, particularly authority arising from ratification.
What private law concept is related to creation of agency by necessity?
Negotiorum gestio.
Which two cases should be contrasted when discussing creation of agency by necessity?
Great Northern Railway v Swaffield and Springer v Great Western Railway.
What are the facts of Great Northern Railway v Swaffield?
A horse was shipped and when it arrived at its destination there was no one there to collect it. The railway company looked after this horse. The railway company, therefore, became agent of the principal (the owner of the horse).
In which case was it held that agency did not arise because in fact the person who was attempting to act as agent had someone whom he could contact for instruction?
Springer v Great Western Railway.
How is agency created by holding out?
This is when a 3rd party believes that a person is an agent and the principal either by positively encouraging this belief or not doing anything to contradict this. This often arises when there has been agency in the past but it has ceased to exist.
What is the creation of agency by ratification?
This is when the agent acts on behalf of the principal without the principal knowing. The principal can choose to ratify these acts either expressly or impliedly.
