Watt- Wear and tear on Armgas Flashcards
Who does Armgas appear to favour?
appears to favour those who want over those who have: i.e
• Those who want= the third parties who seek to enforce the transaction;
• Those who have= the alleged promisors (the principals) who seek to deny the transaction.
Why?
This is because the trend of recent case law founds itself on the idea that reasonable expectations deserve the protection of law.
How can First Energy fit into the orthodox approach?
Steyn based his judgement on reasonable expectations of honest men as a principle which moulds contract law.
Obiter- He said if we accept the Armagas view the reasonable expectations of the 3rd would have been frustrated here, and the decision would be based on an ‘unreal premise’ as to the way commercial men transact this type of business (banking loans).
The application of orthodox principles do not compel this frustration. So he decides that though J did not have authority to make the contract alone, he did have apparent authority to inform 3rd of the decision of P to contract.
Issue with Steyn First Energy obiter?
if widely accepted, would mean a radical makeover of agency law. It is common for people to deal with people whose seniority to make the contract is dubious. Commerce is often undertaken on the chance that the A has actual authority. Reasonable people run these risks, rather than insisting in dealing with someone more senior.
Who were First and Armgas distinguished?
The judges distinguished First from Armgas on the facts (correctly), so they did not need to depart from it.
Backup for First Energy?
It is arguable that the bank’s position was even weaker than the CoA recognised. If a person in charge of a bank branch of the relevant type would have had usual authority to make, and not just communicate, approval of loan contracts, and the only person to remove that usual authority was the A himself, then surely that A should be able to reinstate that usual authority. If the customer was required to believe A’s statement whereby he removed the usual authority he would otherwise have had, why should the customer not be entitled to believe A in his communication of approval to a transaction that would ordinarily have been within A’s authority in the first place?
