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Agency Law
Agency Law
Agency Law
1. DEFINITION OF AGENCY
R/ship where one person known as agent
acts for another =
legal r/ship with third-party.
2. AGENCY EXPLAINED
Agency involves 3 parties
Principal who passes authority
Agent = legal relations between P & A
Third party
3. WHO IS AN AGENT & WHO IS A
PRINCIPAL?
Agent = person authorized to act for
another = legal relations
Principal = Party who employs another to
act on his behalf.
4. RELATION BETWEEN AGENCY & CONTRACT
Relation between A&P is contractual
Privity of contract between P&T
No privity between A&T
5. CAPACITY OF AGENT
P&T must have contractual capacity
Immaterial whether agent has contractual
capacity
6. WHO CAN APPOINT AN AGENT?
Anyone with contractual capacity
Only for lawful purpose
7. NATURE OF AGENCY
R/ship formed by mutual consent
1
Fiduciary r/ship
Mixture of contract law & tort law
8. CREATION OF AGENCY
An agency r/ship may arise in any of the 6
ways:
• Express agreement
• Implied agreement
• Ratification = Kelner v. Baxter, Brook v.
Hook (forged signature)
o Principal must have been in existence at
time of act
o Existence must have been disclosed by
agent
o Principal must have capacity to ratify
o Act must be capable of ratification
(void/voidable)
o Shd be done within a reasonable time
o P must have knowledge of all material
facts
• By necessity = GNR v. Swaffield
o Necessity shd be created by real
emergency not mere convenience
o It must be impossible to obtain
instructions from P
o Agent must act bonafide in the interests
of all
• By estoppels = Lockyer
• Agency by marriage/cohabitation
2
Husband free to rebut presumption in
following ways:
Wife adequately provided
Forbade her to pledge his credit
Shopkeeper previously warned not to
give credit
Public notice in newspaper i.e. not
answerable
Wife’s order excessive or extravagant
Miss Gray v. Earl of Catchcart = clothes
215/950
9. Types of agent
• Universal agent = POA = handles all
affairs
• General agent = represents P in all b/s of
a certain kind
• Special agent = authority to act on a
particular occasion or for a particular
purpose.
AUTHORITY
An agent must act within the scope of his/her
authority
There are two types of authority
Actual authority
Apparent authority
ACTUAL AUTHORITY
3
The authority that a principal in reality has
granted to an agent
Express actual authority
The actual authority of an agent specifically
stated or written by the principal
Implied actual authority (usual authority)
The actual authority of an agent that the
principal has not specified but has purposely
or through negligence allowed the agent to
believe has been granted
• Watteau v. Fenwick
Duty to account
5
o To receive renumeration
o Right of retainer
o Right of lien
o Indemnification
o Compensation
o Stoppage of goods in transit
DUTIES OF THE PRINCIPAL
o Obligation to pay renumeration
o Only where agent has earned it
o Even where P has derived no benefit from
A’s acts
o To indemnify A for acts lawfully done and
liabilities incurred in execution of authority
TERMINATION OF AGENCY
1. By operation of law
o Death
o Insanity
o Bankruptcy
o Enemy country
6
o Frustration
o Subsequent illegality