Agency - Law of Contracts II - Notes
- A person is an
agent only when he acts as a representative of the other in business
negotiations, that is to say, in the creation, modification or termination of
contractual obligations between that and other person. - Krishna v. Ganpathi
- Parties have
called their relationship as an agency is not conclusive enough to say it's an
agency and contradicting fact may prove otherwise.
- A contract of
minor by his agent is valid if minor himself is bound by contract.
- Minor can
become an agent but will not be liable to the principal.
- Banker asked
to keep goods and give to customer on payment. Held banker is a bailee and not
an agent.
- Factor - Agent
entrusted with goods for purpose of selling them.
- Broker - Agent
appointed to negotiate and make contract to sale or purchase of goods on behalf
of his principal.
- Del Credere
Agent - Agent undertaking on payment of extra commission to be liable to
principal for failure of third party to perform contract. Not liable to buyer
for default of principal. Not liable for dispute between buyer and principal
relating to contract or sum due.
- If a person
authorises another to assume the apparent right of disposing of trade in the
ordinary course of trade, it must be presumed that the apparent authority is
the real authority. The agent may bind the principal within the limits of
authority with which he has been clothed by the principal.
- Wife is an
agent of husband if she is buying things of necessity, and has a domestic establishment with husband.
- Agencies of
necessity - Such as selling of goods by carrier if perishable and delivery
delayed due to some reason is valid.
- A pre-existing
agency is necessary to invoke agency of necessity. So finder of goods if spend
money on property of other then it's not agency.
- Condition for
invoking agency of necessity:-
- Inability to
communicate with principal
- Act should be
reasonable necessary
- Bona fide in
the interest of party concerned
- Duties of
Agent:-
- Duty to
Execute Mandate - E.g. Agent is asked to insure goods and he charges the
premium but doesn't insure the good then agent will be liable for any
subsequent loss.
- Duty to Follow
Instructions or Customs - Agent instructed to store goods at a warehouse, agent
stored goods at another equally safer warehouse. Agent held liable. Liley v. Doubleday
- Duty of
reasonable care and skill - Agent liable only for direct consequences of his
act.
- Duty to
communicate with principal
- Duty to avoid
conflict of interest - If agent acts without principal's consent or may conceal
fact from principal or act in a manner disadvantageous to principal, then the
principal may repudiate the transaction.
- Principal has
right to benefit gained by agent dealing on his own account in business of
agency.
- Duty not to
make secret profit - If an agent sells his own stock to the principal without
telling the same to the principal then he must hand over the commission even if
he had sold the stock at prevailing market price.
- Duty to remit
sums
- Duty to
maintain accounts
- Duty not to
delegate - Permissible in following:-
- Nature of
Work - Agent employ auctioneer
- Trade Custom
- Architect appointing surveyor
- Ministerial
Action - Authority to sign
- Principal's
contest
- Sub agent if
properly appointed as if principal's agent only.
- §192 - Sub
agent is responsible to agent but not to principal except in case of fraud or
wilful wrong.
- Remedies of
principal against agent:-
- To ask for an
account and also demand payment of secret & illicit profits
- To seek
damages for disregard of terms of agency as also want of care & skill
- To resist the
claims of the agent for commission and indemnity by the plea that the agent had
acted for himself i.e. as a principal
- Rights of
agent against principal:-
- Right to remuneration
- Agent held auction, person takes information and directly approaches
principal to buy house. Held agent entitled to commission. - Green v. Bartlett
- Right to lien
- Property held by agent for special purpose cannot be liened.
- Right to
indemnity - Agent be indemnified in all lawful contract even in wagering
transaction where contract is void but not unlawful.
- Right to
compensation
- Agent if
having authority act even with improper motives can bind principal.
- An agent
placed in a certain position say manager has implied authority to do all the
acts a person in that position ordinarily does.
- §188 - An
agent has authority to do necessary act like agent asked to sell manure without
warranty sold manure without warranty and this warranty was usual in such
transactions so agent was held not liable. - Dingle v. Hare
- Apparent
authority is real authority.
- Possession of
agent is possession of principal for all purposes.
- If employer
collect premium from wages and doesn't pay, employer is an agent of insurance
company and insurance company is bound to pay.
- Principal
liable for unauthorised act of agent falling under apparent authority.
- So knowledge gained
by the agent in course of business
is considered to be with the principal.
- In cases of
fraud and misrepresentation exaggerated statements by agent are acceptable as
long as they weren't sanctioned by principal.
- Principal
whose name & existence is not made by the agent could only intervene
subject to certain qualifications.
- In case of
undisclosed principal, principal would be bound by the terms between agent and other
party.
- Third party
could repudiate a contract in case of undisclosed principal if third party shows
that had him/her known who the principal he/she wouldn't have contracted.
- Principal is also
liable to third party and if agent goes bankrupt principal needs to pay.
- Agent not
liable for principal's contract even if getting commission.
- If agent
excludes personal liability from contract with foreign then agent's liability
is dissolved.
- To make agent
liable it is essential to show that principal cannot be sued.
- Either agent
or principal or both could be sued when agent is personally liable.
- Agent gives
warranty and not guarantees that if contract within his authority then
principal would not breach contract.
- For
ratification:-
- On Behalf of
Another - If agent doesn't mention of agency no ratification can take place.
- Competence of
Principal -
- Only lawful
acts could be ratified.
- Doctrine
Relation Back - Offer made to unauthorised agent later ratified then if party
revoke offer also prior to ratification then also offer doesn't get revoked.
- If agent's
interest is merely incidental to arrangement say commission or pay out of rent
then that could be revoked.
- Agency gets
over after sale is completed but some courts have held that it extend till
proceeds of sale are being paid.
-
OtuemenOal-za Cassandra Anderson download
ReplyDeletemussuckkome