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Agency Flashcards

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1
Q

What was said in Kennedy v De Trafford [1987] about the term agency?

A

“No word is more commonly and constantly abused than the word ‘agent’.”

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2
Q

What are the three relationships within an agency?

A

Principal –> Agent
Agent –> Third Party
Third Party –> Principal

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3
Q

Name an example of an agency.

A

Sales assistant is the agent for a company (the principal)

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4
Q

When can an agent bind their principal?

A

When they have authority to do so

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5
Q

What are the two types of authority?

A

Actual Authority and Apparent Authority

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6
Q

What is actual authority?

A

Where the principal gives the agent actual authority to enter into the arrangement with a third party on his behalf.

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7
Q

What are the two types of actual authority?

A

Express Actual Authority and Implied Actual Authority

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8
Q

What is Express Actual Authority?

A

Where the relationship is created by an express agreement

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9
Q

How was Express Actual Authority described in Freeman & Lockyer v Buckhurst Park Properties Ltd (1964)?

A

“… a legal relationship between principal and agent created by a consensual agreement to which they are alone parties.”

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10
Q

What is Implied Actual Authority?

A

Comes from implication rather than express words and the scope of the authority will be harder to determine

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11
Q

Describe the case of Hely-Hutchinson v Brayhead Ltd [1968].

A

Chairman of a company acted as the managing director even though he had never been appointed that role. He signed, on behalf of the company, contracts of guarantee and indemnity in favour of third parties debts. When the company tried to avoid liability it was held they were unable to as he was granted implied authority of a managing director to act in such a way.

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12
Q

How did Lord Diplock in Freeman & Lockyer v Buckhurst Park Properties Ltd (1964) describe apparent authority?

A

“A legal relationship between the principal and the third party created by a representation, made by the principal to the agent.”

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13
Q

What is apparent authority?

A

Arises where the principal makes a representation as to give an impression to the third party that the agent has the authority to act on his behalf.

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14
Q

What is the principal’s position when the agent has apparent authority?

A

The principal is estopped from denying the agent that the authority to enter into the contract did not exist.

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15
Q

Where were the three requirements for apparent authority founded?

A

Rama Corporation Ltd v Proved Tin and General Investments Ltd [1952]

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16
Q

What are the three requirements for apparent authority?

A
  1. P, or someone authorised by him, must have represented to the third party that the agent had the authority to act on their behalf
  2. The third party must have relied on this representation
  3. The third party must have altered their position
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17
Q

What would satisfy as the third party altering their position?

A

Entering into the contract itself

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18
Q

Where would agency of necessity be imposed?

A

Where one party (agent) has acted on behalf of another (principal) during an emergency

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19
Q

What are the requirements for agency of necessity?

A

Must have posed such an imminent threat to the principal’s property or other interests that the agent needed to act immediately without there being time for him to consult the principal

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20
Q

What 6 conditions must be satisfied?

A
  1. Agent must be in control of the principal’s property
  2. The agent’s intervention must have been a necessity
  3. It must be impossible for the agent to contact his principal to get instructions
  4. Agent’s actions must be bona fide and in the interests of his principal
  5. Agent’s actions must be reasonable and prudent in all the circumstances
  6. Principal must be competent when the agent intervened
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21
Q

What happened in the case of Springer v Great Western Railway Co (1921)?

A

Bad weather and a strike delayed the delivery of a consignment of tomatoes. The agent sold them before they could perish however as he could have consulted the principal prior to the action it did not qualify as agency of necessity.

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22
Q

What is ratification?

A

If an agent enters into an unauthorised transaction the principal can ratify the contract (accept the transaction)

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23
Q

What was said in Koenigsblatt v Sweet (1923)?

A

“Once you get ratification it relates back; it is equivalent to antecedent authority”

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24
Q

What was established in the case of Keighley, Maxted & Co v Durant (1901)?

A

Only the person whose behalf the agent has acted can ratify (not an undisclosed principal)

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25
What was established in the case of Kelner v Baxter (1866-67)?
The principal must have been in existence at the time the contract was made
26
What was established in the case of Grover & Grover Ltd v Mathews (1910)?
The principal himself must have been competent to perform the act at the time of ratification
27
What was established in the case of SEB Trygg Holding Aktiebolag v Manches (2005)?
The principal will not be permitted to wait and see whether the transaction is advantageous to him before deciding whether to approve it or not
28
Can a void contract be ratified?
No
29
What is a disclosed agency?
Where the third party is aware that there is a principal and an agent and who each party is
30
What are the rights and liabilities of the disclosed principal to an an agent who has actual authority?
The principal is entitled to enforce the agreement against the third party. The third party may likewise enforce it against the principal
31
What are the rights and liabilities of the disclosed principal to an an agent who has apparent authority?
The principal cannot enforce the contract against the third party. The third party may enforce it against the principal
32
What is the exception to the rule preventing the principal enforcing a contract against a third party?
Where the principal is entitled to, and does, ratify the contract
33
Can an undisclosed principal sue a third party?
Yes, even though the third party was unaware the contract was made on their behalf.
34
When will an undisclosed principal be unable to sue a third party?
When the agent did not have actual authority to make the contract
35
What 3 situations will a principal not be entitled to sue the third party?
1. Where an express term of the contract made between the agent excluded the relationship of agency 2. Where, by implication, there is a term in the contract made between the agent and the third party that excludes the intervention of an undisclosed principal 3. Where the third party intended to contract with the agent personally and not as an agent
36
What are the rights and liabilities of the third party to an an agent who has actual authority?
The third party will be entitled to enforce it against the principal The principal will be entitled to enforce it against the third party
37
What are the rights and liabilities of the third party to an an agent who has apparent authority?
The third party will be entitled to enforce the contract against the principal The principal will not be able to enforce the contract against the third party
38
If a third party settles with an agent, have they also settled with the principal?
Yes, provided the agent had either actual or apparent authority to accept monies on behalf of the principal
39
What are the rights and liabilities of the agent to the third party?
Agent cannot be sue or be sued on the contract made with the third party
40
What are the exceptions where the agent can sue for a contract made with a third party?
Where the agent takes personal liability for the contract
41
What are the rights and liabilities of the agent to the third party when the principal remains disclosed?
The agent is liable to the third party as the third party thought he was in the contract directly with the agent
42
What are the rights and liabilities of the agent to the third party when the principal is revealed?
The undisclosed principal then becomes liable for the contract
43
When would an agent be liable to the principal for breach of warranty of authority?
Where the agent said he had the authority to act however he did not
44
What 2 rights might a principal have?
1. Remuneration 2. Indemnity 3. Lien
45
What is remuneration?
Provided the agent acts within his authority then the agent will be entitled to be remunerated by the principal
46
Can remuneration be implied?
Yes, however the court will be slow to imply a term of this nature into the contract
47
What is indemnity?
An agent is entitled to be indemnified by his principal for expenses, losses and liabilities that he reasonably incurs whilst executing his duties
48
What is lien?
Where the agent is owed money by his principal he is entitled to retain the principal's property until he receives payment.
49
What are the two types of duties an agent holds to his principal?
Contractual Duty and Fiduciary Duty
50
What are the 3 contractual duties that an agent owes to his principal?
1. A duty to obey his principal's lawful instructions 2. A duty to act with due care and skill in the performance of his duties 3. A duty to perform his obligations personally
51
When will an agent not have a duty to obey his principal's lawful instructions?
When the relationship is due to a unilateral agreement as the agent will not have made a contractual promise. Also if the agent is a mere gratuitous agent he will not be bound
52
Does a gratuitous agent have a duty to act with due care and skill in performance of his duties?
He does but only in tort as there is no contract
53
What Act is the duty to act with due care and skill in performance of his duties implied in?
Supply of Goods and Services Act 1982
54
When are the 5 circumstances an agent can delegate his duties to a sub-agent?
1. The principal expressly or impliedly authorises it 2. It is usual practise within that profession 3. The nature of the agency requires it to be performed partially or wholly performed by a sub agent 4. The delegation is necessitated by an unforeseen circumstance 5. The duty is purely 'ministerial' and does not require particular confidence or discretion
55
Why does an agent owe a fiduciary duty to the principal?
The agent has the power to affect legal relations between the principal and third party and therefore occupies a position of trust and confidence
56
What imposes the fiduciary duty on an agent?
Equity
57
Does a gratuitous agent owe these fiduciary duties?
Yes, all agents owe a fiduciary duty to their principal's
58
What are the 4 fiduciary duties owed by an agent to the principal?
1. A duty to avoid a conflict of interest 2. A duty not to make a 'secret profit' or to accept a bribe 3. A duty to account to the principal for payments received 4. A duty to preserve confidentiality
59
What was established in the case of Boardman v Phipps (1967)?
An agent must not, without the principal's consent, use the money to make a profit for himself or use any information or knowledge for his own benefit which he acquired with the position as an agent
60
What was established in the case of Clark Boyce v Mouat?
If the agent discloses a conflict to the principal who may then if he wishes permit the agent to continue to act for him with the full knowledge of the conflict
61
What was established in the case of Imageview Management Ltd v Jack (2009)?
An agent is not allowed to accept commission from a third party without the principal's approval
62
What are an agent's two key duties in respect to payment?
1. He must keep such monies separate from his own money unless permitted by an agency agreement to mix the funds 2. He must keep and maintain accurate accounts of transactions and furnish his principal with them when he requests them
63
What would occur if the agent fails to keep separate accounts?
He will out his own funds at risk as there is a presumption any funds the agent cannot prove are his own are the principal's
64
How high is the duty to preserve confidentiality?
Higher than merely taking reasonable precautions with the principal's information
65
When does the duty to preserve confidentiality end?
Never, it survives the termination of the agency agreement
66
Where the agent makes a profit as a result of a breach of a fiduciary duty, what are the remedies available?
- Dismiss the agent without notice - Recover any profits made by the agent as result of the agent's breach - Rescind the contract made with the third party - Recover the amount of the bribe or bring a claim in damages against the agent
67
What are the two ways an agency can be terminated?
Termination by agreement | Termination by operation of the law
68
What is termination by agreement?
When the task has been completed and the agent is no longer needed or by a fixed date attached to the agreement
69
When will a termination of operation of the law arise?
1. Where the principal or agent loses legal capacity (death, mental incapacity) 2. Where the principal or agent becomes insolvent 3. Where the contract between the principal and agent becomes frustrated
70
How are Commercial Agents governed?
Commercial Agents (Council Directive) Regulations 1933
71
Where is a commercial agent defined?
Regulation 2(1) Commercial Agents (Council Directive) Regulations 1993
72
Where are the duties of a commercial agent set out?
Regulation 3(1) Commercial Agents (Council Directive) Regulations 1993
73
What does Regulation 4 state?
The duties of the principal to his commercial agent

Commercial Law (1 decks)

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