Commercial Law and Legal Issues - Assignment Example

Commercial Law Name: Institution: Date: Question 1 In this case, there are many legal issues that arise from this. The first legal issue is when Penelope as the principle had asked Rodney as the agent not to order expensive or luxury commodities through her credit card, and if Rodney could go against this request, it could result in legal issue. The other legal issue is the liability responsibility within a domestic relationship (Quinn, 2009). This is whether Penelope had the responsibility to over the liabilities acquired by Rodney or not. In relations to the family laws in Australia, the legality of these issues can be decided differently. In the first case, the family law requires that the couples to be legally responsible for the liabilities of the other if the liability is acquired within the precincts of the previous such agreements. In the first legal issue, it is to determine whether Penelope had a financial responsibility to settle the debt of the commodities ordered by Rodney from her credit card. Normally, Penelope had agreed to regularly pay for amounts that had been put on her credit account for the groceries ordered by Rodney. The fact that Penelope had paid out the credits means that they have been in an established agreement where Penelope could pay for groceries order by Rodney. In this scenario, it legally means that, and the grocery could hold that, Penelope had the responsibility to pay for all the groceries that were ordered by Rodney regardless of their value, whether expensive or luxury, therefore, holding all other legal issues constant, Penelope had the responsibility to settle the debt after Rodney ordered $2,500. The other legal issue is the agreement. This is the principal-agent agreement. Penelope had requested Rodney not to order expensive commodities and luxuries to be paid through her credit card. The agreement between Rodney and Penelope to exclude expensive and luxury items from her credit card accounting was not binding. It is said it was not binding because there was no proof to show that it existed and thus its legality could not be proven. For the purposes of having a binding agreement, an agreement that could have made it a legal responsibility for Rodney to pay for the Microwave, it could have been important that the agreement to exclude the expensive and luxury items be made official either through appending signatures to a written agreement. This could have been made even more binding if the pair went ahead and to deposit such an agreement to the grocery to ensure that the crediting of the card for the expensive and luxury items could not happen unless there was the authorization to deliver such orders from Penelope. From the lack of the binding agreement between the two, by the fact that the agreement was only oral, denies Penelope any legal advantage to claim that there was an agreement against expensive and luxury items. Therefore, in this issue, like Penelope had taken responsibility over other liabilities resulting from Rodney orders, she was legally responsible to this liability as well. The other legal issue within this case is the issue of mutual agreement or consent before any financial responsibilities can be assumed by any party. It is required by law, that any party within domestic relationships or marriage to consult the other party before any financial responsibility or liability can be assumed. This is to ensure that the responsibility is assumed when the both parties are willing and able to bear the responsibility. In this case, even after knowing that Penelope would not agree to purchasing such an expensive commodity, Rodney went ahead to order it without first of all consulting Penelope. This violates the need for the consultation is major financial responsibilities. The legal implication of this is that Rodney should be held responsible for disregarding a very important partnership requirement of consulting the other. However, this does not mean that the grocery should stop charging the credit card, rather, it means that Rodney should be made to shoulder the cost of the microwave by reimbursing the credit card, if an agreement was not arrived it for Penelope to pay. Question 2 In this case, there are numerous legal issues that can be observed. The first revolves around the carrying out the task or the obligation designated in the agreement, the other legal issue involves going against a written lease agreement, the other legal issue involves the responsibility in a violated agreement, and finally the responsibilities to liabilities resulting from violated duties or agreement by either an agent or the client. In these case, Tim was given the instruction to visit Ararat, conduct an inquiry, and make recommendation (Australian Capital Territory, 2017). The obligation did not include execution of any lease agreement on behalf of the client. However, Tim overstepped his mandate to execute a lease arrangement with Adam. However, MODO could not approve the arrangement resulting in Adam taking a legal action against MODO. The first legal issue involve Tim taking the responsibility of overstepping the mandate or the obligation that was assigned to him. According to the agency agreement, Tim was only allowed to represent MODO in three things that is visit Ararat, make enquiries on retail locations available, and then make a report with recommendations. This was as it was stipulated in the instructions. Any legal issue that arose within these three mandates, then both Tim and MODO could be required to take responsibility. However, any other issue that could arise from activities outside or in violation of these agreed mandates could be the responsibility of Tim because he could not be representing the company. Therefore, for Tim to go ahead and execute an agreement with Adam with a written lease agreement, he was acting against the mandate and in this case he was no representing MODO and any legal issue that could arise from an overstepped mandate could be the responsibility of Tim. In this regard, it means that the company had no legal responsibility to honor a lease arrangement that was made in violation of the instructions that it had given to the agent. The other legal issue is whether Adam had a legal rationale to take a legal action against MODO or whether he could have taken it against Tim. when Tim was executing the a written lease agreement with Adam, he was doing so on behalf of MODO and not for himself. When he negotiated for the arrangement with Adam, he did it on behalf of the company. Therefore, to Adam, he was not making an arrangement with Tim, but with MODO through it’s against Tim. Adam did not have access to information regarding the instructions given to Tim. therefore, he did not know what legal responsibility that Tim had with respect to the arrangement made. In deciding to take a legal action against MODO, Adam had the legal rationale to do it. The other legal issue that is evident in this case is whether MODO had a legal right in failing to honor the lease arrangement that Tim had executed with Adam on behalf of the company. The company was specific on the instructions that it gave to Tim as its agent. The company only wanted the make enquiries on possibilities and then present recommendation so that the company could decide whether it was feasible to move into the new location of Ararat. Maybe, there could be lease requirements that could have meant that such a move could not have been feasible for it and in such a situation, the company maybe could have decided against such a move (Australian Capital Territory, 2017). Also, there could be factors within the company that Tim did not know that could have influenced the company’s decision whether to proceed with the move or not. Therefore, by Tim assuming the responsibility of executing a lease arrangement on the company, he was denying the company the chance for the due diligence and the company could not commit to any arrangement that were not right for its business. In this regard, the company had the legal right to deny taking responsibility over any actions or arrangements made by its agent who acted outside the mandate and were acting in violation of instructions, in such a case, Tim could have borne the responsibility. Question 3 A The role of the apparent authority to establishing the existence of the principal-agent relationship is to persuade the third party that the agent has the authority, whether express or implied, to act with regard to the particular matter (Rasmusen, 2001). The apparent authority could be achieved through having the principal grant the agent to use the principal’s brand, name, or other details like logos and resources. The apparent authority can also be gained through the persuasive talks by the agent with a third party (ARTS LAW, 2013). The role of the apparent to establishing the existence of principal-agent relationship is very important because it allows the agent some discretion to act on behalf of the principal even if there is no such a relationship existing. For example, in the example above, Tim could be having some apparent authority that could allow him to act on behalf of MODO as the principal. It is as a result of such an apparent authority that the third party or Adam could have agreed to allow Tim to execute the lease arrangement. The apparent authority on the agent could be used to carry out the designated or agreed agent roles or could be used by the agent as marketing tool to persuade the third party. I some instances, the apparent authority is false and the agents could only be using it for their own advantage, this shows that the apparent authority could be used for malicious gains by the clients. It I important for the third parties to therefore establish whether there is a principal-agent relationship that exist before they could commit to get into agreements with any agent with apparent authorities. This is because not all apparent authorities could be real or for the right mandates. B There is the role of the apparent authority to establishing the scope of the agent’s power to bind the principal with third parties. The apparent authority could be used by the agent to assume power to bind the principal with third parties (D’Agostino, 2011). The third parties might outright assume that if the agent has apparent authorities, then they have the power to bind their principals with third parties. However, this power could either be existing or no-existent. If such power is existing, then the third parties have a binding relationship or agreement with the principal executed by the agent. On the other hand, if such power is non-existent, even if there is apparent authority, then the third party need to be careful because the principal have no legal responsibility towards the agreement made thereof and such agreements made by the agent on behave of the principal are not legally binding . Most importantly. It is worth noting that the apparent authority has the ability to make it look like the agent has the power to bind the principal or perceived principle with the third parties. Therefore, it is important that before any third party, before committing to be bound by any perceived principal by an agent, carry out the due diligence to establish the scope of the power that the agent could be having to act on behalf of the principal. This is particularly important when the binding agreement could have legal implications it turned out that the agent was acting on his own discretion and with no power to act on behalf of the principal. References ARTS LAW. (2013). Agency agreements. Retrieved from Arts Law Cente of Australia: https://www.artslaw.com.au/info-sheets/info-sheet/agency-agreements/ Australian Capital Territory. (2017). Agents Act 2003 . Sydney: Australian Capital Territory . D’Agostino, T. (2011). Overview — Agency. Lexis Web. Quinn, M. (2009). Marriage and Domesic Partnership Issues . Personal Finance. Rasmusen, E. (2001). Agency Law and Contract Formatio. Harvard Law School, 1-36. Read More