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Law of Agency

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Clement Akapame

on 20 September 2016

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Transcript of Law of Agency

THE LAW OF AGENCY
Go
ye
therefore, and teach
all nations
,
baptizing them i
n the name of the Father,
and of the Son, and of the Holy Ghost
Matthew 28:18-20
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:
Principal
Agent,
Third party
Introductory Matters on the Topic

Issues worth considering
The External and Internal relationship.
a. The
Internal relationship
is concerned with the dealings between Principal and Agent and the obligations which they owe each other.

b. The
External relationship
are concerned with the ways in which Agent brings Principal into contractual relationship with Third Parties
PRELIMINARY POINT

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
relationship
that exists between two persons when one, called the
agent
,is
considered in law to represent the other
, called the
principal
,in such a way as
to be able to affect the principal’s legal position
in respect of
strangers
to the relationship
by making of contracts or the disposition of property"
Some Definitions
The definitions raises two issues

The
authority
of the agent and
The
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..

"the
fiduciary relationship
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 “…

the
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"
In
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
An Agent
act
for another
A trustee
holds
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
Agency-Sale/Disposal-Privity
AMB IMBALLAGGI v. PACFLEX
MERCANTILE INTERNATIONAL GROUP v. CHUAN [2000] EWCA Civ 288, [2000] 1 All ER (Comm) 788
4. Agency, Distributorship and Franchise
CREATION OF AGENCY
AGENT'S AUTHORITY

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
(Necessity)
4. Ratification
(China-Pacific SA v. Food Corpn of India [1982] 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 [1972] 2 GLR 65)


See Yasuda Fire Case Per Coleman J.
Issues: Obligation, Remuneration, Consideration
Ratification
Requirements:
(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
ab initio
(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
Remuneration
Reimbursement and Indemnity
Lien

Termination
Termination by Act of the Parties
Mutual Agreement
Lapse of Time
Occurrence of a specific event
Campanari Case

Termination By Operation of Law
Death
Bankruptcy
Insanity
War between Principal and Agent's country
Change in Circumstance
Gordon v. Essien

End of Topic Two
Takeways
Difference between Agency and other relationships
Creation of Agency Relationship
Agents Authority
Duties and Rights of Agents
Termination of the Agency relationship

GOD THE FATHER
APOSTLES/PASTORS
SINNERS
Ratification?
Matthew 28:18-20
Agency Relationship in the Bible
Full transcript