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Law of Agency
Transcript of Law of Agency
therefore, and teach
baptizing them i
n the name of the Father,
and of the Son, and of the Holy Ghost
A large proportion of contracts are made, at least on one side through agents.
This part of the course is concerned with the law relating to the use of agents in Commercial Transactions
Three parties are involved:
Introductory Matters on the Topic
Issues worth considering
The External and Internal relationship.
is concerned with the dealings between Principal and Agent and the obligations which they owe each other.
are concerned with the ways in which Agent brings Principal into contractual relationship with Third Parties
The word ‘agent’ is used by lawyers in a more restricted sense that by business people.
If you go the ACCRA MALL you will very likely find a shop
which describes itself as Sony Agent.
In the legal terms it is a distributor, rather than an agent.
THE CONCEPT OF AGENCY
Also there are footballers and their Agents.....They are just managers or handlers
PRELIMINARY POINT 2
1.Although agencies are usually created by contracts, a contract is not essential.
2.Within families and between friends a gratuitous agency, in which
somebody does something for someone else without expecting to be rewarded,
is very common.
Classically, an agent has
power to contract on behalf
of his principal, which
will bind the principal.
There are some agents whose job it is to negotiate but who does not have power to enter
binding contracts on behalf of the principal.
So an Estate Agent is hired to find someone willing to buy the client’s house. He will not normally have authority to enter into a binding contract on the client’s behalf.
Character of an Agent
An agent may be an agent for some purposes of a particular transaction and a principal of other purposes.
For instance, if a client instructs a stockbroker to buy or sell shares on his behalf on the stock exchange, the relationship between the client and the stockbroker is basically that of principal and agent.
But when the broker goes on to the exchange to carry out the instructions, he acts as a principal, because the rule of the stock exchange is that all its members deal as principals and not as agents.
DEFINITION OF AGENCY
There is no single Statute which attempts to
comprehensively deal with the law of agency
in Ghana. Unlike Sale of Goods (Act 137) and Hire-Purchase (NRCD 292).
The law of agency is therefore mainly based on the common law.
This does not mean that there are no Statutes which bearings on the law of agency.
According to GHL Fridman (6 th Ed., 1990; 9)
“Agency is the
that exists between two persons when one, called the
considered in law to represent the other
, called the
,in such a way as
to be able to affect the principal’s legal position
in respect of
to the relationship
by making of contracts or the disposition of property"
The definitions raises two issues
of the agent and
consent of the parties
Almost all the leading authorities on the law of agency suggest that the
principal and the agent must have agreed
either in the form of a contract, or otherwise,that the agent should represent the principal.
For example Bowstead defines agency as..
which exists between two persons,
one of whom expressly or impliedly consents
that the other should represent him or act on his behalf and other of whom similarly consents to represent the former or so to act"
.The American Restatement of the Law of Agency also defines agency as “…
relationship which results from the manifestation of consent,
by one person to another, that the other shall act on his behalf and
subject to his control,
and consent by the other so to act"
GARNAC GRAIN CO. INC v. HMF FAURE AND FAIRCLOUGH LTD
, Lord Pearson said; “ The relationship of principal and agent can only be establish by the consent of the principal"
BOARDMAN v. PHIPPS..........
REPUBLIC v HIGH COURT, ACCRA; EX PARTE ATTORNEY-GENERAL (
DELTA FOODS LTD., INTERESTED PARTY)
Distinguishing Agency from other similar relationships
1. Agency and Trust
They can both affect the legal position of the persons on whose behalf they act
property on behalf of another
When it comes to enforcement of rights:
Beneficial owner of Trust can enforce his/rights against the Trustee on a proprietary basis
A Principal may only enforce his rights on a personal basis (Execption to this rule is
A-G FOR HONG KONG v. REID-Principal might have proprietary remedy for breach of fiduciary duties
An Agent represents the Prinicipal to the outside world
A Trustee does not represent the Beneficiary and cannot contract on his/her behalf
2. Agency and Bailment
Two main distinguishing factors:
Bailee acts with leave of the bailor. Has certain powers over the bailed property. The Bailee does not represent the Bailor.
Bailee cannot enter into contracts on behalf of the bailor...but can do things incidental to the bailment.
See TAPPENDEN v. ARTUS
3. Agency and Sale
See Section 1 of the Sale of Good Act
AMB IMBALLAGGI v. PACFLEX
MERCANTILE INTERNATIONAL GROUP v. CHUAN  EWCA Civ 288,  1 All ER (Comm) 788
4. Agency, Distributorship and Franchise
CREATION OF AGENCY
1. Actual Authority (Express or Implied)
(Freeman v. Buckhurst, Ireland v. Livingston, Baah Ltd v. Saleh
Bros, Hely-Hutchinson v. Brayhead)
2. Doctrine of Apparent Authority
(Rama Corp Case: Representation, Reliance and Alteration of position, Ada Cooperative Case)
3. Operation of Law
(China-Pacific SA v. Food Corpn of India  AC 939)
Mechanical Lloyd v. Nartey
Aluminum Industire Case
Servants and Independent Contractors see Lloyd v. Grace
Del Credere Agent
Will Indemnify the Principal
in return for extra commission
Agency Agreement: Contractual v. Consensual
(Agbemashior v. State Insurance  2 GLR 65)
See Yasuda Fire Case Per Coleman J.
Issues: Obligation, Remuneration, Consideration
(Nartey v. Mechanical Lloyd Assembly Plant [1987-88] 2 GLR314)
Existence of Principal at the time of act, (Kelner v. Baxter)
Principal must be competent at the time of the act
Act must be not void
(Brook v. Hook )
Effect of Ratification
(Bolton Partners v. Lambert)
Ratification after acceptance is binding
Limitations on the rule Bolton:
Ratification should be made on time
If offer made subject to ratification, Principal cannot sue for breaches before ratification, cancellation by agent and 3pty, where it will lead to undue prejudice of 3pty
Disclosed and Undisclosed Agency
Disclosed Agency (Montgomerie Case)
Undisclosed Agency (Siu Yin Kwan Case)
Duties of the Agent
Duty to Perform
Duty of Care (Chaudhry case)
Duty not to delegate (Delegatus non potest Delegare)
Fixed Fiduciary Duties: Conflict, Secret Profit, Account-
Boardman v. Phipps
Rights of the Agent
Reimbursement and Indemnity
Termination by Act of the Parties
Lapse of Time
Occurrence of a specific event
Termination By Operation of Law
War between Principal and Agent's country
Change in Circumstance
Gordon v. Essien
End of Topic Two
Difference between Agency and other relationships
Creation of Agency Relationship
Duties and Rights of Agents
Termination of the Agency relationship
GOD THE FATHER
Agency Relationship in the Bible