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Flashcards in Agency Deck (63)
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Sorrell v Finch

Estate agents are a form of agent, although they only have the power to make representations.



Under s 1(1) Factors Act 1889, factors are defined as mercantile agents with the authority to buy, sell and raise money on the security of goods for principal.


Re Nevill

Agency is distinct from sale and re-sale. Mellish LJ said that if one party is free under the contract to sell the goods at any price he likes, and receives payment at any time hie likes (but is bound to pay the other party a fixed price for the goods at a fixed time), then this is sale and re-sale rather than agency.

Objective construction given to agreements as to whether they are agency - does not matter what the parties thought their agreement was.


Agency and Trusts

Distinction is in terms of the external aspect - T cannot create contractual obligations between B and X, unlike in agency.


Agency and Bailment

Distinction is in terms of the external aspect - the fact that E is a bailee does not mean that E's actions create contractual relations between B and X.


Freeman and Lockyer v Buckhurst Park

Diplock LJ set out the differences between actual authority and apparent authority.

Actual authority = legal relationship between P and A created by consensual relations to which they alone are parties.

Apparent authority = legal relationship between P and X, created by a representation P made to X that A has authority to enter into the relationship.


Two types of actual authority

1) Express actual authority
2) Implied actual authority


s 1(1) Power of Attorney Act 1971

An instrument creating a power of attorney shall be executed as a deed by the donor of the power.

I.e. agency relationship under express actual authority can be made through a deed.


Ireland v Livingstone

Traditional view = if words in the document as to the scope of A's actual authority are ambiguous, then if A acts in any of the prescribed methods that are consistent with the ambiguous language then this should not be construed against him.


European Asian Bank v Punjab

Goff LJ suggested that A should seek clarification for patently ambiguous wording before proceeding, if time permits, before acting on P's behalf.


Cooper v Nat West Bank

If there is ambiguity in the wording of A's scope of actual authority, then it would be unreasonable to proceed. Test = if A's construction of the words was reasonable, then their according actions fall within the scope of their actual authority.


Re Oriental Bank Corporation

For actual authority to be successfully revoked, notice of the revocation must be communicated to the agent.


Hely-Hutchinson v Brayhead

Actual authority may be implied by the courts in the same way as implying an ordinary contractual term.

Chairman did not have actual authority to enter into agreements on behalf of the company - needed to be approved by the board. CA held that A had implied actual authority to enter into agreements since he had done this in the past without express actual authority and simply reported back to the board who accepted it.


Barrett v Deere

If P allows A to appear as his agent to X, then P may be bound by agreements made between P and X - even though A was not actually P's agent.


Summers v Solomon

If P allows A to continue to appear as his agent after the agency has terminated, then P can still be bound by this.


Hely-Hutchinson v Brayhead

If P equips an officer of the company with certain title, status and facilities, then the representation of greater actual authority to act on P's behalf may flow from this status.


Akai Holdings (HK CA)

Lord Neuberger said that in the commercial context, X does not need to make any enquiries as to A's actual authority to deal on P's behalf - he only needs to honestly and rationally rely on the representation. Therefore, even if X was unreasonable in relying on the representation made by A, there may still be apparent authority which binds P.


Quinn v Automotive Group

CA confirmed that X does not need to make enquiries as to A's actual authority under English law, so long as they honestly and rationally relied on the representation.


The Ocean Frost

If X knows that A does not normally have authority to enter into a particular agreement, but relies on A's representation, then P is not liable to X.


First Energy v Hungarian International Bank

X knew that A normally did not have authority to make loans himself - had to be approved by the board. X sued P for refusing to advance the loan after A purported to grant it to X.

CA held that P was bound on the basis that A had apparent authority to notify X that the loan was approved. Reasoning = commercial law should protect third parties who seek to rely on written documentation.

Thus, X could rely on A's apparent authority even though he knew he did not have actual authority to grant the loan, because A had made a written representation.

Distinctions with The Ocean Frost:

1) Written documentation purported that A had actual authority to make the loan.
2) Agreement was highly unusual in The Ocean Frost in the context of previous agreements between X and A - X should have sought clarification.



P gives retroactive authority to an unauthorised agreement made by A which was outside of the scope of A's actual authority.


Wilson v Tumman

Ratification is a well-established rule of law. P has the power to ratify unauthorised acts by A and bind X to those agreements.


Boston Deep Sea Fishing v Farnham

P must have had, at the time of the acts of A, the power and capacity to make the contract for ratification to be possible.


Kelner v Baxter

P must have been in existence at the time of A's unauthorised act to ratify it. E.g. a newly incorporated company cannot ratify a contract agreed prior to its existence.


Bolton Partners v Lambert

This case illustrates the far reach of ratification. P claimed specific performance in relation to an unauthorised agreement made by A with X after X had revoked the offer. Thus, P had the choice to either not be bound by the agreement, or to hold X to it if it was favourable to him.


Managers of the Metropolitan Asylum Board v Kingham and Sons

Qualifications on ratification:

- Ratification must take place within a reasonable time. 10 days deemed to be too long for ratification in this case.

- Ratification does not apply where X's offer was expressly subject to ratification.


Bird v Brown

Ratification is not effective where it would affect property rights that have arisen in favour of X in the meantime.


Kidderminster Corporation v Hardwick

This authority was before BP but was not cited in the case - it suggested that X may withdraw from its obligations altogether prior to any ratification by P.

Contradicts the rule in BP since in BP X's attempt to revoke the offer prior to ratification did not work, since ratification had the effect of giving the agreement authority ab initio. This means that if X tried to withdraw, he would be in breach of contract.


Walter v James

If A and X agree to cancel the transaction, no ratification can take place thereafter.


Presentaciones Musicales SA v Secunda

Dillon LJ said that overruling Bolton Partners v Lambert is not a course open to the CA - therefore BP remains good law until the SC overrules it.