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1

INTRO-What is the 2nd lecture about?

Authority of Agents - excercise auth to bring about binding rels btw principal and 3rd party

-If no auth = no rels

2

INTRO-Types of authority?

-Actual
express actual authority

implied actual authority
incidental
usual
customary

-Apparent

-Usual

3

INTRO-What is easier to identify when talking about actual auth?

Easy to identify expressed / than implied as has many diff forms, different types of implied actual auth

4

ACTUAL AUTH-What is the most known case for actual auth & what does it explain?

Hely-Hutchinson v Brayhead Ltd [1968] 1 Q.B. 549

- For company directors (= different type of agent in a company type sit as a company has no physical presence and you have to act through agents) a dispute arose in context of a company transaction entered into for a company they use company e.gs to think about what diff btw e a auth is and I a acuth

-explains what diff is btw expressed and implied actual auth

5

ACTUAL AUTH-What is expressed actual auth?

-auth that has been expressed or explicitly conferred upon someone in terms of actual words eg if I have given some 1 specific auth to do something to go out and sell or make textbooks, that is expressed auth that I have given that particular person

-‘It is express when it is given by express words, such as when a board of directors pass a resolution which authorises two of their number to sign cheques.’

6

ACTUAL AUTH-Implied actual authority?

Implied a auth- Not given in expressed words need to look whether auth given from conduct of parties/sit cirumstances of case

Conduct- you look at conduct (mainly from principal) in the way they conducted themselves if so = auth, so not explicitly given but e.g say you're shopkeeper do you expect just to work on till or check the whole shop etc (is there implied actual auth to do other things within the partic role appointed to you)

7

ACTUAL AUTH- how are we dealing with implied actual auth relaistically?

‘It is implied when it is inferred from the conduct of the parties and the circumstances of the case, such as when the board of directors appoint one of their number to be managing director. They thereby impliedly authorise him to do all such things as fall within the usual scope of that office.’

- realistically you cant give expressed act for every single thing but we can say for certain acts/transactions they will fall into implied actual auth and can be binding upon you (bind togev as implied actual auth)

8

-ACTUAL AUTH- what about actual auth express or implied for the parties?

‘Actual authority, express or implied, is binding as between the company and the agent, and also as between the company and others, whether they are within the company or outside it.’ - even if 1 party does not necc think so.

9

-ACTUAL AUTH- what about expressed auth?

Expressed auth is conferred by expressed words, but they are not all expressed in same way it can be done in different ways,you're not focused on the conducts you're focused on whats been said

EXPRESSED actual auth can be:
-formally conferred
-informally conferred
(think about actual official legal docs)

10

-ACTUAL AUTH- What is formal and informal expressed actual auth, what do you need to watch out for and what is the disad?

1.formal - it can be formally conferred by virtue of legal docs e.g power of attorney writes legal doc = high level of formality attached to it
-Informal- it can be informally conferred as in this example by virtue of a latter, latter email or verbal that would constitute

2. beware of those where where do u find them,do you find them in a letter, email, power of attorney (where are those words actually contained) will decide whether form or informal

3. Problem- if expressed the assumption is that there is no doubt it was actually said you're not focused on the conduct as you're focused on whats been said e.g you were specifically auth to sell furniture etc but disputes arise by the interp of words.

11

-ACTUAL AUTH- What about the dispute element of expressed words?

you still need to interpret words to those extent as could be debate on how we constrew words - yes expressed auth was conferred on agent but at the same time are we ALL CLEAR OF WHAT THESE WORDS MEAN?

- do they need interp
- are they ambigious ( might not be clear on instructions given)

Still will be an issue on construction of interp in expressed whether formal/informal

12

-ACTUAL AUTH- What is the case for formal expressed auth?

Jacobs v Morris [1902] 1 Ch. 816

A appointed under power of attorney: ‘to purchase or make any contract for the purchase of goods’, ‘to make such purchase for cash or credit…’-

agent borrowed 4,000 (supposedly acting within p.o.a but used it on own purchases, was p bound by trans)

found out: not bound, fell out expressed actual auth - ct constrewed wording of p.o.a it did not extend to permitting the agent to borrow money on the principals behalf, limited to what said, not independent borrowings of money

13

-ACTUAL AUTH- -what is the case for informal expressed auth?

INFORMAL – Johnston v Kershaw

P: ‘I beg to confirm my letter of the 23rd of February, and hope you will have executed fully all the cotton ordered, and consider still in force. If executed, please regard this as a new order for 100 more.’
A bought 94 bales.

p write letter to agents - refers to previous letter about previous order towards a 's of buying cotton- if fuliflled last order could you buy next 100 bales of cotton.- a did 94 - p said delivery inad and therefore not bound - dispute was based on wording of letter than a obliged to deliver 100/ does it say can fall short but wording shown p wasn't even certain if 1st was fulfilled looks at state of market, that the order may have possibly to not be fulfilled- so even though said 100, wording indicated instruction to buy as many as could and then make difference up later = there was no expectation

court- agent could do as many as could and bring rest later - worked in a's favour.

14

-ACTUAL AUTH- What are the 3 forms of Implied actual authority?

3
-Incidental

-Usual
Hely-Hutchinson v Brayhead: ‘… when the board of directors appoint one of their number to be managing director. They thereby impliedly authorise him to do all such things as fall within the usual scope of that office.’

-Customary
Cropper v Cook (1868) L.R. 3 C.P. 194: usage in wool trade in Liverpool regarding brokers’ discretion

15

-ACTUAL AUTH- Apparent authority

Hely-Hutchinson:
‘Ostensible or apparent authority is the authority of an agent as it appears to others.
It often coincides with actual authority.
Thus, when the board appoint one of their number to be managing director, they invest him not only with implied authority, but also with ostensible authority to do all such things as fall within the usual scope of that office.
Other people who see him acting as managing director are entitled to assume that he has the usual authority of a managing director. But sometimes ostensible authority exceeds actual authority…’

16

-ACTUAL AUTH- What is incidental implied actual auth & case?

agent asked to perform partic act but they implied inc auth to do things which incidental/ related to that partic act

Rosenbaum v Belson [1900] 2 Ch. 267: ‘Please sell for me my houses …. And I agree to pay you by way of commission the sum of 2 ½ % on the purchase price accepted.’

case: rosenbam v belsom- p essentially instructed a to sell houses and pay this much by commission, a finds purchasers but also entered into agreement with those purchasers but p say not bound by those agreements, bc all asked them to do was find buyers not execute teh agreements on p's behalf

court held: actual auth was sell house but they had implied actual auth to enter agreeements on bhealf of p

-so if youre in position where don't want a to go further you have to be careful about conferring explic auth on them and defining limits on partic auth otherwise it will be implied inci auth to do various other things which are tied to what you’ve asked them to do.

17

-ACTUAL AUTH- what is actual implied usual auth?- GO OVER

USUAL AUTH- relatable to concept of certain forms of implied auth comes within scope of somebodies role

-so look at position some1 given e.g managing director etc is it the implied usual auth to apply this partic act bc effectively goes within territory of what person asked to do e.g assistant expected to do things of an assistant

case: hely - important to know- director who wasn't actually managing directors but then had mr richards of brayhead lmtd= chairman of board and prone to making decision without consulting fellow directors

mr r entered into agreement with mr hely - mr hely to bump more money into business- mr hely Hutchinson we want u to keep ur company going for long as poss as were thinking about buying and in order to do that if u need more money into company if for any reason u should suffer loss we brayhead will indemify and restore loss- he did lose money and asked brayhead for comp- they denied laibility and said not bound- mr rich as agent of brayhead had expressed auth to privde indem, is there implied act auth?-

court held: yes there was implied actual auth - def of implied can be inferred by conduct of parties & circum of case- mr richards did usually make financial decisions he did frequently commit the company two major contracts and form other directors later then yes he could be said to have excersed that implied actual auth and if so brayhead= bound= in this case he was not managing director but if he had been then he would be able to say this falls within auth of what manging director of a company does= MAJOR CASE ON IMPLIED – GOT KNOW IMPLIED ACT AND NOT KNOW THIS –



18

-ACTUAL AUTH- what is implied customary auth?

Customary auth- looking at did this agent have implied actual auth based on the CUSTOMS of whatever market/trade/ geographical area the agent is operating in

e.g ur agent would be saying I had implied auth bc this is how we normally operate

case:Cropper v Cook:- broker- if ur broker selling on behalf of p can u sell in own name= no only sell in p's name- cook sold in own name p argued said not bound but hw possible to prove this was normal in the real trade in Liverpool that brokers had discretion had choice whether to sell in on names or not and so by virture of that custom, broker had implied cust auth to sell in own name to go against grain of normal conduct for conduct, so its not implied actual auth that has derivied for what p said or done it by particul trade, - this is how things are done in liverpool

19

APPARENT AUTH-What is the next type of authority?

Apparent auth– so if ur looking whether agent exercised auth did they excersie auth or apparent auth?

Apparent auth defined in hely case - focused on not what explicit/impliedly conferred but looking at whether the agent has auth when looking at perspective from 3rd party and anyone else- if apparent= p is bound by transaction as a 3rd party you are arguing this p boun a acted in appar auth not actual

20

Case for apparent auth?

Hely case also explains what apparent auth is its reffered to as Ostensible or apparent authority is the authority of an agent as it appears to others but we prefer appar- apparent can go way beyond actual

explains apparent can overlap act- so u can have both in same person e.g as somebodies agent, I may have actual auth in respect of things he asked me to do I (expressed or implied) i can still have apparent auth, cos when 3rd parties look at them, have more auth than appears thats how term overlap.


e.g hely managing director concept, board of directors wll appoint to be mana= implied usual auth to do somethings but point of view from 3rd party that person may have apparent auth to do way more things than his actual/implied auth allows him to do . - exists same time

21

-What is it not enough with apparent auth?

* apparent auth were looking beyond an agency rels having being created without consent and without actual agremenet,and ur thinking about in what circumstances is principal bound where agent has acted without actual auth can this transaction still stand because were saying that agent acted with apparent auth, so in our rama corp case

-not enough to say person has apparent auth - ‘Ostensible or apparent authority … has been termed agency by estoppel…’ apparent auth is effectively a form of agency by estoppel but there are similarities btw the two and where u have this kind of agency rels, there are 3 things which have to be established,

22

what are the 3 ingredients for agency by estoppel?

3 ingredients:
(i) a representation - come from p not a
(ii) a reliance on the representation from 3rd party, and 3rd party =
(iii) an alteration of position resulting from such reliance.’

23

e.g of the 3 ingredients together?

So you the principal made the rep to me that this agent had auth and I relied on that rep and bc I relied, I altered my positon,I did something that I wouldn’t otherwise had done, I was induced into this particular tarnation which wouldn’t have gone into if I had known that ur agent didn’t have auth, so were saying that if a particular agent has apparent auth, we want to be able to identify that these 3 ingredients/elements are there

24

limitations of apparent auth & case?

apparent auth cannot arise where 3rd party knows that this agent has limited auth

Armagas Ltd v Mundogas Ltd - 3rd party knew a had lim auth ( no dont have actual auth to do something) to enter in 3 yr agreement to charter a ship = no bc we said in elements 3rd party must have altered their position (in entering contract) but if knew then of course it didnt

25

Armagas Ltd v Mundogas Ltd [1986] 2 All ER 385 in short?

‘Ostensible general authority can, however, never arise where the contractor knows that the agent's authority is limited…’

26

what about baskind?

Baskind p.100:
must T have altered position to his detriment?
are (ii) and (iii) separate elements?

- many cases say there needs to be but there also saying that there doesn’t need to be detriment it is enough 3rd party relied on that parituclar rep, but on top of that don’t have to prove det or suffered loss because of that reliance.

- can the seperate elements be regarded as one?- so if relied on rep can we just say assume altered pos-issue to talk about

27

What is the best known case on apparent auth?

Best known cases on apparent auth is freeman which illustrates point of what extensive or apparent auth as compared to what looking at earlier with actual auth

28

-what happened in freeman?

Freeman & Lockyer v Buckhurst Park Properties Ltd [1964] 2 QB 480: K a director of BPPL, hired architects to act for the company. BPPL refused to pay their fees.
F &L entitled to rely on [K’s] ostensible authority to give them instructions on behalf of BPPL: there was a holding out of K by BPPL as its agent to conduct its business within the ordinary scope of that business.
BPPL knew of and acquiesced in K’s professing to act on its behalf: impliedly representing that he has the company's authority to do so. BPPL ‘is considered to have made the representation, or caused it to be made, or at any rate to be responsible for it.’
 as against F&L, which had altered position in reliance on the representation, BPPL estopped from denying the truth of the representation.

29

freeman in my own words?

- company is principal - k is agent and he hires claimant who affirm of architects to provide services application of planning permisision, acrhitest do work but company wont pay and say that k had no auth to enter contract therefore not bound to pay freeman, t

court concluded: yes k had excercised apparent auth an therefore company was bound, and with apparent auth = there is rep by principal (company) which isn’t easy company has no person its a legal entitity so we look at board of directors as whole,they rep that k was some1 with auth to act for them in matters relating to prop devlop, and specifically company had done this by effectively allowing k to be the person who frequently admitted company 2 major contracts on his own initiative without consulting other directors and then report later date what he had done, so bc other directors knew that k did without prior agreement, other directors were treated as having rep on behal company that had auth and therefore company could not deny that k had that auth, k made that rep lockyer relied on that rep they had been lead to provide those services for the companya dnt ehy ahad altered their positon in snes e that they had provided eserives probably wouldn’t have and thereofr company bound= NOW ESTOPPED FROM DENYING that k had any auth to engage architects
-

30

-what happened in summers v solomon?

Summers v Solomon (1857) El&BL 879
SS’s jeweller’s shop in Sussex managed by AS. AS ordered jewellery several times from plaintiff. AS travelled to London and purported to buy jewellery on behalf of SS, which he appropriated.
The question is, not what was the actual relation between [SS] and [AS], but whether [SS] had not so conducted himself as to make the plaintiff suppose [AS] to be [SS’s] general agent. What passes between [SS] and [AS] cannot limit the [SS’s] liability to the plaintiff.
‘ …As soon as you have given the agent authority to pledge your credit, you render yourself liable to parties who have acted upon notice of such authority…’