5: Agency

Question 1

Great Northern Railway Co. v. Swaffield (1874)

Agency by Necessity, Law of Agency

Answer 1

• the railway company, through no fault of its own, was unable to deliver a horse which had been consigned by rail and was unable to contact the owner for instructions.
• the company paid for the horse to be stabled and was held entitled to recover the costs from the owner, since the money had been expended on the owners behalf.

Question 2

Kelner v. Baxter (1866)

Agency by Ratification, Law of Agency

Answer 2

• the promoters of a company bought goods on its behalf before it was incorporated.
• Once it was formed the company purported to ratify the purchases, but was held not entitled to do so.

Question 3

Chaudhry v. Prabhakar (1988)

Care and Skill, Duties of an Agent

Answer 3

• an apparently knowledgeable car enthusiast advised a friend to purchase a second hand car which turned out to be a worthless insurance write off.
• He acted as her agent advising the purchase and was held have failed to exercise proper care and skill.

Question 4

Lucifero v. Castel (1887)

Good Faith, Duties of an Agent

Answer 4

• principal engaged an agent to buy a yacht for him. The agent found a yacht, bought it himself and then tried to sell it to the principal for a higher price.
• the court held that the principal was required to pay no more than the amount which the agent himself had paid for the boat.

Question 5

Keppel v. Wheeler (1927)

Full Disclosure, Good Faith, Duties of an Agent

Answer 5

• an estate agent who had been engaged to sell the principal’s house allowed the latter to accept an offer of £6,150 and failed to inform him of a higher offer of £6,750.
• the seller recovered £600 in damages from the estate agent, which was the difference between the offers.

Question 6

Hippisley v. Knee Brothers (1927)

Secret Profit, Good Faith, Duties of an Agent

Answer 6

• advertising agent who obtained trade discounts from printers was held liable for failing to pass on this benefit to his principal.
• he had charged the principal the full price for the work and kept the amount of the discount for himself.

Question 7

Watteau v. Fenwick (1893)

Validly Appointed Agent with Restricted Authority, Apparent Authority, Authority of Agents

Answer 7

• defendant appoints a manager of his public house. Licence for it was taken out in managers name (Mr Humble) which appeared over the door.
• manager buys cigars on credit from Watteau. Manager would usually have authority to do this, except Fenwick had forbidden him to do this.
• Watteau successful in claim against Fenwick as he was unaware of knowledge of restricted authority.

Question 8

Panorama Developments (Guildford) Ltd v. Fidelis Furnishing Fabrics (1971)

(Validly Appointed Agent with Restricted Authority, Apparent Authority, Authority of Agents)

Answer 8

• a company secretary hired cars in the company’s name but used them for his own purposes.
• the company had to pay the bill because hiring the cars within the usual authority of a person holding the position of company secretary.
• the hire company could not have known that he was abusing his position.

Question 9

Freeman and Lockyer v. Buckhurst Park Properties Ltd (1964)

Apparent Agent who has never been appointed, Apparent Authority, Authority of Agents

Answer 9

• board of Buckhurst allowed on member, K, to act as if he were managing director, although he had never been appointed.
• the board had previously honoured contracts made by K but in this case claimed not to be bound by a contract made with the claimants.
• court held that Buckhurst were estopped (prevented) from denying that K was managing director and that it was within the usual authority of a managing director to make such contracts.
• the contract was therefore binding.

Question 10

Freeman and Lockyer v. Buckhurst Park Properties Ltd (1964)

Apparent Agent who has never been appointed, Apparent Authority, Authority of Agents

Answer 10

• board of Buckhurst allowed on member, K, to act as if he were managing director, although he had never been appointed.
• the board had previously honoured contracts made by K but in this case claimed not to be bound by a contract made with the claimants.
• court held that Buckhurst were estopped (prevented) from denying that K was managing director and that it was within the usual authority of a managing director.
• the contract was therefore binding.