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Creation of agency (By Implication (where the principal implies by their…
Creation of agency
By Implication
- where the principal implies by their previous actions that an individual is dealing on their behalf;
- also possible to imply from the nature of the relationship between the 2 parties that one is acting as the agent of the other
Watteau v Fenwick Purchasing cigarettes was within the range of acts usually carried out by a landlord, therefore the defendants were bound
Barclays Bank v O'Brien There was no implied agreement between the bank and the husband for him to act as their agent in the transaction
In cases of necessity
- a party usually already committed to dealing with the principal, finds it necessary to undertake some additional task not expressly authorised by the principal.
- subject to the following conditions:
- it was not possible to obtain instructions from the principal;
- there was a definite commercial necessity;
- the agent acted honestly and took only the minimum action necessary
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Ratification
- one party accepts responsibility for the actions of another after the event;
- may occur where there was no principal-agent relationship at the time, or where the agent acted in excess of their authority;
- effect of ratification - the situation is the same as if the act had been authorised originally;
- effect of ratification - should the principal continually ratify contracts by an agent in excess of the agent's authority, it is possible for the 3rd party dealing with the agent to assume that the act will be ratified by the principal
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In Writing
- Contract form - clear and unambiguous terms and conditions of the agency, the authority of the agent, etc
- written agreement can be used to reinforce common law rights and responsibilities or specifically exclude some rights/responsibilities that would otherwise apply.
- agent - someone appointed to bring the principal into contractual relations with 3rd party;
- rarely involved in the contract and usually assumed no liability on it
Actual authority - a principal and agent agree in words that the agent will have authority to act for the principal;
Apparent/ostensible authority - arises on account of the principal having made a representation to a 3rd party that the agent has authority to act on his behalf; If a principal's word or actions indicate that he has consented to a person acting as his agent, then the principal may be estopped from denying this once a 3rd party has relied on the represenation