week five Flashcards
what did Freeman v Buckhurst Park Properties concern
a director of a company acting as if they were managing director, though not appointed as managing director. could this person bind the company in contracts with third parties?
what was the decision in Freeman v Buckhurst Park Properties 1964
in allowing the person to do so, the board were holding him out to act as the managing director and therefore have that authority that a managing director would customarily have. the actions did bind the company involved because of the holding out - apparent authority.
how do you know that the company is holding someone out as being in a position for apparent authority
whoever is holding the person out must themselves have authority to hold someone out on behalf of the company - a second level of authority.
why are some cases (e.g. Hely-Hutchinson) dealt with considering actual authority vs other cases being dealt with using apparent authority (e.g. Freeman) even where the cases are very similar
the court will look for the more obvious source of authority
what did Savill v Chase Holdings 1989 concern?
a property deal which involved the Savill’s buying property from Chase Corporation (who owned Chase Holdings)
what was the question for the court in Savill v Chase Holdings
Mr Savage worked for Chase Holdings and purported to have authority to bind Chase Corporation - does Savage have this authority?
what was the courts decision in Savill v Chase Holdings
He had no actual authority to bind Chase Corporation and there was no evidence Chase Corporation held out Chase Holdings or Savage as having apparent authority - the companies are separate
what is necessity
an extreme situation whereby someone can become agent without authority
what did China Pacific SA v Food Corporation of India 1982 concern
a cargo ship stranded on a reef. The master of the ship made an agreement with salvors for salvage on behalf of the cargo owner, but in fact the master had no authority to bind the cargo owner
what was the result of China Pacific SA v Food Corporation of India 1982
the master of the ship was held to be an agent of the cargo owner anyway, despite having no authority to be so, as this is a very narrow situation where one person is in possession of another persons goods and these goods are in imminent jeopardy
what is ratification
where an agreement is apparently made on behalf of a principal, but the principal is not actually bound by the agreement - where there is no actual authority.
And in such situation, the principal can ratify the agreement (accept is as it was made) as if there was actual authority in the first place
what happened in Keighley, Maxsted & Co v Durant
Mr Roberts was authorised by Keighly Maxsted to purchase corn at a certain price. instead he purchased corn from durant at a higher price in his own name. he did not intend to bind Keighley Maxsted.
Keighly Maxsted later agreed to ratify the purchase but then changed their mind.
what was the rule found in Keighly, Maxsted & Co v Durant
in order for an agreement to be ratified, the agreement must be made on the principals behalf
in this case the court held that because the contract was originally made on Mr Roberts’ own behalf and so it could not be ratified
what is the main idea of the idea of capacity
the principal must have had the capacity to enter into the contract at the time of the agreement
what happened in Boston Deep Sea Fishing v Farnham 1957
a French vessel was taken over by an English company when France fell during the 2nd world war. this company entered into various agreements relating to the vessel and the French company later tried to ratify after the war had ended
could the French company ratify the agreements of the English company in Boston Deep Sea Fishing v Farnham 1957
no because at the time the agreements were entered into the French company was an alien enemy and so could not contract with English companies because this would be trading with the enemy
the French company didn’t have the capacity to enter into those agreements at the time, and so couldn’t subsequently ratify them
what rule does the companies act s182 - 185 provide an exception to?
an exception in relation to company pre-incorporation contracts in terms of capacity (it is not needed here as in the common law rule)
an agent is bound with respect to the authority that he has ____ or _____
claimed or asserted
what happened in Collen v Wright 1857
Wright signed a lease as agent for the property owner but actually had no authority to do so. the other party suffered some loss due to the lease and couldn’t sue the actual owner and so sued the agent, Wright, for damages.
