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Relations between Principal, Agent and Third Parties

were looking at relations btw these 3 parties, web of rels that are involved

- the agent is there to bring these two into binding rels, we want to know what consequences does that have for agent in respect of principle and for agent with respect 3rd party,

- and from 3rd parties perspective does it give rights against both of them or only rights against 1 of them


what else with intro?

its part of nature of agency rels that agent has fiduciary duties but might have commercial agents where governed by statue, so what statutory duties arise as well arise if ur an agent


Relations between P and A

-A’s duties to P

-A’s rights against P

Where there are duties in law there tends to be rights aswell – DUTIES= RIGHTS


Relations between P and T,
A and T

-A brings P and T into direct contractual relations- before we always assumed 3rd party new a acting for p but its more complex than that

-This doesn't happen in every case- are rights diff if 3rd party knows im acting for p than if didn't know

-What are the implications where P is disclosed?-aware
-What are the implications where P is undisclosed?-unaware


Anish kapoor case?- paint

this artist has exclusive rights to a paint blackets black paint as artisit he is the only person who can use that black

-another artist banned him for ever acquire pinkest pink, he got the pinkest pink,

-some1 acquired on his behalf…hed be some1s principle and person who acquired= agent and 3rd party said never propsed if gonna sell it to anish undisclosed, but same time if u r 3rd party u determined never to transact with some1- would you be bound to p if didnt know existed?

if no shouldn’t be bound then how far should law interevene- commercial certainty one of virtues for commercial law


Disclosed agency: implications

disclosed more simple - principal is the only person that can sue and be sued under that contract - not agent

Montgomerie v United Kingdom Mutual Steamship Association [1891] 1 QB 370


-disclosed agency wakefield?*

Wakefield v Duckworth & Co [1915] 1 KB 218
W photographer, member of D&Co requested photographs for purposes of trial. W claimed cost of photos from D&Co
‘Prima facie in such a contract the plaintiff would have recourse to the principal and not the agent’



Good illustration od this is –wakedieled- this photso meant to be used for trial in which d and co defencing client? Mr wakeffield records in books as the debt owed by d and coa nd when goes unpaid he sues and danco resists laibiltiy saying just acting on behal of principle they shouldn’t be sued- court agreed does not make them liable they were ordering photos on behald of client no themselves


Disclosed agency: liability for A?

Any general rule has exceptions and 1 of them is:

- parties have expressly contracted that agent is going to be LIABLE either concurrently alongside principle
-or the agent is liable to the exclusion of the principle

Montgomerie v UK Steamship…


-What is also another way to look at liability?

look at the way in which the party i.e agent has actually signed partic contract, and if there was intention should that agent should be bound or not

Internaut Shipping GmbH v Fercometal [2003] EWCA Civ 812
“Sold by Ongley & Thornton on account of owner…” Pike v Ongley & Thornton (1887) 18 QBD 708


so two ways in which a is bound?

-if expressly contracted to be bound
- or bound in way which signed doc - such a way clear they're making themselves liable under contract


in expression of contract liability?

In an expression revision of contract you would have clause contract which will say contract btw p and 3rd stating rights of obl of both

-focus on signature when there is no specific clause= clear they were assuming some form of liab bc not all time parties have full contract e.g parties could just exchange letters and haven't had contract with rights and obligations


-Ongley case?

determing agent liability from series of doc/communications which was case in Sold by Ongley & Thornton on account of owner…” Pike v Ongley & Thornton (1887) 18 QBD 708 - eu agents sending invoice 3rd party sold these goods on account of order- when 3rd party persuaded them to enforce that contract q whether they had assumed direct liab to 3rd or whether clear they were acting as agents from wording of invoice that they could not be deemed to have liab to 3r, here it was evident by accounting on account of owner shows there was p behind it so did not have liab under this sale contract


Disclosed agency: T’s enforcement rights?

Disclosed agency basics -Contract belongs to principal, except the agency have explciity assumed liability or they have implicity assumed liab by the way signed contact, BUT WHERE DOES IT LEAVE OUR 3RD PARTY


Disclosed agency: T’s enforcement rights cases?

Debenhams Ltd v Perkins [1925] All ER Rep 234:
‘When an agent acts for a disclosed p, it may be that the agent makes himself or hersef liable as well as the principal.


3rd parties actual enforcement?

-3rd party- this does not mean you can sue both you have to choose 1 but can't get judgement on 1 and sue the other (captured doctrine)- merger and election -election says you have to elect who youre suing (who you're enforcing your rights on) merger same effect but slightly trickier, saying when u have converted contract you have into judgment cant use same contract to get another judgement, so now contract with a forms basis of judgement im going to persue that judge to finality and dont have to use contract to persue p.


-overall for 3rd party enforcement?

So if ur a 3rd party In this scenario this gives u choice of ppl tos ue but doesn’t give right to sue bith= stronger position if ur general rule doesn’t apply but nto so strong that u sue veryone involved u have to make choice of who ur going to sue


Next step for disclosed agency?

-So that’s the kind of foundation of disclosed agency (expressly or implicitly make yourself liable if not 7)
-when our agent can be liable
- 3rd party enforcement rights

a can also be liable in 7 MAIN SITUATIONS so not that easy being an agent – tread careful in these areas with -so in what other sit can agent be laible where they have contracted into that liab directly?


what is the 1st one & case?

1. A is the real principal - i enter contract acting like its for p but its actually me. i want 3rd party to be influenced by the poss that im acting for but it's really me.

Rayner v Grote (1846) - rayner act as a for p to enter contract with g, by 1st delivery g knew r was p, so refused to accept remainder - r tried suing for non acceptance as g did 1st with full knowledge and facts , g was liable to accept


What is the 2nd sit & case?

2. A acts on behalf of non-existent P - a can be liable by stat especc if act on p who don't exist

-s.51 Companies Act 2006 ‘A contract … made by or on behalf of a company at a time when the company has not been formed has effect…as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.’ doesn't matter what u call urself just have to do act


How does sit 2 help 3rd party?

This is way of protecting 3rd parties. It gives 3rd pary some1 to sue i.e the agent me , so the 3rd pary should not be stuck without recourse or remedy against anyone companies included


What is sit 3 & case?

3. A liable by virtue of custom - disclosed p scenario It may be custom in some trade that the agent is personally liable in the contract they enter into on behalf of their principle

Pike v Ongley & Thornton (1887) 18 QBD 708-signed such a way clear they were selling on account of principal, that’s what saved them, that parttic clause in their invoice cos in particular context of that trade it was customary fro brokers acting on principals to be laiible.


What is sit 4?

4. A liable by virtue of collateral contract btw them and 3rd party-
E.g lets say our agent happens to be an auctioneer a 3rd party going to auction is going contrct with auctionee that auctioneer a is going to accept the hgiehst bd, so if im 3rd parry making highers bid = cc with this auc that theyre going to accept my highest bid, an to some extent there is a cc btw 3rd party and auc that the auc is selling something that they are entieled empowered to sell on behalf of prinole. u wouldt buy something from auc if they had no permission to sell.

that creates liab for the agent even thou theyre trying to bring about contact that theyre not involved in at all. As an agent u assume some responsible udner that cc whether u like it or not.


what about collateral contracts in 7 sits?

So that basic form of cc but there is some specific type of cc which is taken as being closely associated with the closed agency scenarios and ghat the cc which is als a breach of warranty of auth- these terms used in confusing itnechangle way. No.4 dif to this 1 which is very specific form of cc .


what is sit 5 & case?

5. (Collateral contract) Breach of warranty of authority, a asserted to 3rd party they have p's auth, based on asser 3rd party entered contract and would'nt have otherwise Assertion then turns out untrue but by time 3rd discovers = loss, they don't get recourse from p bc a didnt have auth so can't sue a directly but bc said unture= liable for 3rd party and pay damages and compensate for loss bc ur warrant of auth turned out to be false.

-Firbank’s Executors v Humphreys (1887) LR 18 QBD 54
supports this


Another case for cc warr?

Collen v Wright (1857) 8 E&B 647
W purportedly leased G’s farm to C indicate has auth to enter into agremenet on behalf of someone elses farm, C cultivated and improved the farm, G refused to sign the lease on basis that W had no authority - . He had no auth from me and I have no obligation to u

collen initially sued g and failed as a had no auth so tried to sue a- wouldnt have entered otherwise- liable based on breach of war of auth- even if a believed true still liable - couldnt sue p so sue a compensate for loss


What is 6 sit?

6. A’s tortious liability:

-Tort of deceit
False representation made knowingly/without belief in its truth/ recklessly as to its truth or falsity -

-Negligent misrepresentation
negligent misstatement
negligent misrepresentation (Misrepresentation Act 1967)

A deals with goods in a manner that is inconsistent with T’s possession - lets say u dealt with good in manner that inconsistent with 3rd parties posse e.g u either tendered 3rd parties goods to wrong person or refused to tender goods that point mean to u could be reliable according to tort of conver

agents of an author/editor/publisher in same position as principal-also liable for defam-if ur agen to p and repeat or pass on any defam statement cocnering 3rd party- wouldn’t priotise thes in exam

wouldn't prioritise these in exam


what is 7 sit?

7. 7. Unnamed principal

A purportedly enters into contract on behalf of P, discloses that he is agent but does not name P to 3rd party: still knows but didnt mention name - you are liable as a -GENRAL RULE- 3rd party presumed tro agree to contrct with unidentified principal as long as agent liable and agent also agreeing to liable as not saying who acting for

Benton v Campbell, Parker & Co Ltd [1925] All ER Rep 187
presumption regarding T’s consent and A’s agreement-3rd person would only agree to contract with unkown p if 3rd party knew making my sel fliabl as agent and is this scenario agnt agreed to make liab by mnot identifying principle= eprosnal liability too =

Fleet v Murton (1871) L.R. 7 Q.B. 126
custom where broker does not disclose P’s name on the contract

undisclosed is when don't know at al


-Disclosed agency: P’s liability for A’s torts?

if agent comits any torts are there any cirum in which principal answerable to 3rd pary for those torts


Ps liability for a's tort case?

Cornfoot v Fowke (1840) 9 LJ Ex 297
F sought A’s help in finding a house, asked if there was ‘anything objectionable about it’. Following entry into agreement, found adjoining brothel. - could p be liable for a's misrep

held yes: either u as p told agent not to reveal this or whether didn’t give agent enough info– innocent misrep u as p reliab for agent

agent in position fraud 3rd party therefor u as principle= laible = MORE FRAUD/DISHONESTY SPECTRUM also torts and neg