AGENCY
Is there an agency relationship?
• Holding out or estoppel – p.554
o Arise between two people by virtue of one, by words or conduct ‘holding out’
that the other is their agent or permitting the latter to do so
• Ratification – p.554 + p.563
o When one person acts on behalf of another, without having authority to do the particular act, the person on whose behalf the act is done may, by
‘ratifying’ it, render the act as valid and effectual as if it had been done by their duly authorised agent
o Keighley, Maxsted & Co v Durant – p.563 Operation of law
• Necessity
o Emergency situation may occur which allows one person to bind another without the authority of that other
▪ Great Northern Railway Co v Swaffield and Munro v Willmott – p.555 o Four factors are essential
1. A person must have been entrusted with another’s property
2. An immediate expense must be required for the preservation of the property, or there must be some commercial necessity for the action, that is, there must be an emergency
3. It must be commercially impossible or extraordinarily difficult to communicate with the owner of the property
4. Agent must act bonda fide in the interest of the principal
• Arising out of cohabitation
o E.g. The law presumes she has her husbands authority to pledge his credit for necessities in all domestic matters ordinarily entrusted to a wife
o Debenham v Mellon – p.556
Who is the agent? Who is the principle? Who is the third party?
What type of agent is there?
• Special agents – p.552
o Appointed performance of some special act or to represent the principal in some particular transaction, such act or transaction agent’s trade, profession, or business as an agent
• General agents – p.553
o To act for the principal in all matters, or in all matters concerning a particular trade or business, or of a particular nature OR
o To do some act in the ordinary course of their trade, profession or business as an agent on behalf of the principal, for example where a solicitor or broker is employed as such
• Universal agents – p.553
o Whose authority is unlimited to do such things which the principal may do through the instrumentality of another
o Rare in practice and when they do exist they are appointed by extensive powers of attorney
Creation
• By deed power of attorney
• By writing
• By word of mouth verbal offer followed by acceptance What authority have they been given? - p.557
• Actual arises out of an agreement between the principle and the agent - p.558 o Express principal has expressly given the agent in words or writing o Implied agent may have further implied authority to do whatever is
necessarily incidental to carrying out the principal’s express instructions
▪ Hopcroft v Edmunds – p.559
• Apparent conceptually distinct from actual authority - p.559
o No actual authority but instead the mere appearance of authority o Device to protect third parties
o Principal is bound by those acts that fall within the scope of the agent’s authority even when they acted outside the terms of their actual authority o Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd – p.560 What duties does the agent owe the principle? – p.564
• To follow the principles instructions
• To act in person
• To act in good faith Lintrose Nominees Pty Ltd v King – p.565
• To make full disclosure of any personal interest
• Not to make secret profit Regal (Hastings) Ltd v Gulliver
• To exercise reasonable skill and care Mitor Investments Pty Ltd v General Accident Fire & Life Assurance Corp
What rights does the agent have? – p.568
• To be paid
• Indemnity and reimbursement
• Right of lien
• Agent must be effective cause of sale What liabilities does the agent have?
• Agent to the principle – p.569
o When they act beyond the instruction given
o When the agent is negligent in carrying out tasks given
o The distribution of confidential information acquired during the employment of the agent
• Agent to the third party – p.570
o Agent discloses the name of the principle Kelner v Baxter – p.571 o Agent does not disclose the name of the principal but does disclose the
existence of the principal
o Agent does not disclose the existence of any agency, that is, where the agent acts as if he or she were a principal
When can the agency be terminated? – p.574
• By performance or completion of agency
• Impossibility of performance
• Agreement
• Revocation
• Death
• Insanity
• Bankruptcy
• Renunciation by the agency Remedies?
• Damages
• Rescission
• Sue for recovery of commissions Not an agency
o Employees – employed on such basis that they are subjected to control regarding the manner in which their work is to be carried out contract of service
o Independent contractors – exercise their own discretion as to the manner in which they carry out the work they undertake to perform contract for service
o Trustee – more later
EXAM
1. Is the person an agent?
2. What authority do they have?
3. Did they go out of the scope of their authority?
4. Who is liable and what are their rights?
