Principles of the Law of Agency - Essay Example

Agency Law Issues From the case study, it can be observed that the issues facing Cassie, Theo and the pat. Cassie entered into a lease contract with Theo on behalf of MME enterprise in which pat who is the owner and the executive office of MME enterprise declined the terms of contract since, Theo was only sent to inspect business viability in Blalarat and not to proceed into entering into a contract Theo takes legal action against the decision of Pat to decline the contract. Principles The law of agency provides a set of contractual as well as non-contractual fiduciary associations that entails an agent who is permissible to act on behalf of the principal. The contract is intended to create a legal relation with a 3rd party. Concisely, it might be considered as mutual associate between the principal and the agent in whom the principal, explicitly or discreetly, permits the agent to work under the control of the principal and on his behalf. In this regards, the agent will negotiate on behalf of the principal and the 3rd parties creates contractual associations1. The mutual right and liabilities between the principal and the agent depict commercially as well as legal realism. The owner of an enterprise places reliance frequently on another person to perform a business. In the case of registered company, since a company is fictitious legal entity, it might just act through human agents. The principal is bound by the agreement created by the agent, as far as the agent undertake his duties within the scope of the agency. A 3rd party might place reliance in good faith on the representation by an individual who recognize himself as an agent for another person (the principal). It is normally efficient in terms of cost to confirm if an agent is having permission to act on behalf of the principal. Where an agent is acting without permission of the principal, the agent will held legal responsible. Application It can be depicted in that Cassie who is an agent of pat the owner of MME enterprise is not responsible for the pat decline in the contractual terms entered by Cassie on behalf of Pat. Since, Cassie was legally permitted to do a feasibility study of business investment opportunity in Ballarat and therefore, the decision reached by Cassie is binding since, he was acting on behalf of MME enterprise. As a result the contract entered by Cassie is binding and a rescind of the contract would make the MME enterprise legal responsible for the act of Pat who is the owner and the Executive officer of MME. The reason for this is that MME if separate legal entity which can sue and be sued and can enter into a contract2. Case law Morgan’s v Launchbury The House of Lords held that to attach liability on the owner of the car for negligence of hi drivers, it was appropriate to depict the owner’s behalf as the agent. To determine the presence of the agency relationship, it was appropriate to depict whether the driver was making use of the car at the permission of the owner’s car, expressly or impliedly or on instructions, and was doing so in execution of the duties delegated to him by the owner of the car. The fact that the driver was using the car with the authority from the owner and that the reasons for which the car was on use was the one that that owner of the car had interest in; it was insufficient to determine vicarious liability. Conclusion It can therefore be concluded that Cassie will not be held liable for the breach of the contract entered between MME and Theo. On the assumption that there is general liability on the of Pat who is the principal for the tortious acts of Cassie who is the agent, it is appropriate to make a comparison of the basis for this kind of liability against the basis for vicarious liability. In agency point of view, the obligation of liability on the principal for the tortious act will be sufficient where the principal choses an agent and depict an ideal approach of establishing the quality, strength as well as weakness of an agent. Also, the principal has delegated the duty of a specific class of actions to the agents, it is unjust that the principal who derives the benefits of the agent’s work, must bear the risk of the argent going beyond his authority3. The law provides that where an agent breach the duty owed by the principal is not autonomous based on the agent’s tort liability to a 3rd party who is harmed due to the conduct of the agent of breaching the conduct merely when the conduct of the agent breaches the duty that is owed by to the 3rd party by the agent. This is not true for Cassie since, he has not breach any duty owed by Pat who is the principal. Pat who is the principal is legal liable to Theo who is a 3rd party harmed by an action of the agent to enter into a lease contract devoid of the consent by the Pat the principal. This is because the duty of Cassie was within his scope of the agent’s actual permission or ratified by the principal as well as the conduct of the agent might subject Pat to the tortious liability Relationship between agency and contract law An agent is a person who acts on behalf of another person, having been provided as well as presumes some extent of authority to act as an agent. The agency relationship may be created by contract which is express or by operation of law which is implies. Agency Created by Agreement Many agencies are created by contract. As a results, the general rule of contract law in chapter of the contract controlled by law of agency. Agencies might as well be created devoid of contract, by agreement. Nevertheless, the three principles of contract are significant since there are needs for consideration, the writing and the contractual capability4. The Consideration Agencies created by agreement are not pledged essentially. It is uncommon for an individual to act as an agent for another person devoid of consideration. The Formalities Many oral agency contracts are lawfully binding. The law does not need that oral agency contract to reduce to writing. In reality, many agency contracts are documented to get rid of problems of evidence. There are circumstance where the reasons of agency being not be accomplished within a year or where the association will last for more than a year. The Capacity A contract is void or voidable when a party to a contract is deficiency of capacity to make one. Where both parties (Principal and agent) lack the ability for instance where a minor elects another minor to enter into a contract, there might be no doubt that the contract is voidable. The law centers on the principal where the principal is minor or incapacity, the contract might be avoided even where the agent us very competent. Agency Created by Operation of Law Many of the agencies are entered by contract, but agency is as well created impliedly or apparently. An Implied Agency In areas of social needs, the court has avowed tan agency to exist where there is lack of a contract. The agent association then is considered to be implied by operation of law. An implied agency as well arose where an individual acts as an agent might and the principal understanding that the agent is acting so, agrees, permitting an individual to consider himself as an agent. There are some of the basic facts in Weingart v. Directoire Restaurant, Inc. in {section 11.31. of the “Creation of Agency} The Agency Relationship Case study “Bamgboye v. University of Ilorin & Ors “ The court of Appeal was provided with an opportunity to determine the attributes of an agency relationship. Held; It was held that interalia, that agency, in law, is employed to mean the association that exist in which an individual depict some authority or ability to create a binding relationship between an individual who act as a principal and a 3rd parties. The court furthermore considered that the question of whether an association exists between any situation place dependence on term used by the parties to define it, but on the nature of the contract between the principal and the agent. The fact that parties to a contract that considers their association as an agency is not decisive, where the occurrence of an association does not validates a finding of agency. The presence of an agency might just be presumed from facts and situations of every case. It is deem that consent if important case where such an association was created by agreement and contract. It is rare to find that in commercial business, many agents are elected by consent. Nevertheless, under some situation, the law enforces or thrust agency association upon the parties despite of their consent or knowledge. IN agency relationship, the agent acts on behalf of the principal implying that, provided that the agent acts within the law and his authority, the acts of the agent in consideration to the 3rd parties are recognized by the principal, three agents is therefore the alter ego  Of the principal that links the principal and the 3rd party. When an agent enters into a contract on behalf of the principal, a direct predetermined association or privity of a contract shall exist between the principal and the agent as well as the 3rd party tom a contract5. Conclusion The law of agency is an important company law since companies may just do business through agents. The function of agency law is ensure that agents bring commercial parties to a contract in such a way that renders the parties, not the agents being held accountable, and being in a position to impose the contract. The principal on whose behalf the agent transact business need to be in a position of placing. There is interest other than the safety of the principal against misuse of power by the agent. The safety of 3rd parties with whole the agent transact business with, the safety of the agent against legal liability on behalf of the principal as well as the right of an agent might have against the principal. Reference list   Read More