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CHAPTER 3 - LAW OF AGENCY (BUSINESS LAW), Learning Objectives, research…

- - - - Section 140 - When a person by his words or conduct implies another person as having authority to act for him
        
        Panorama Developments v Fidelis Furnishing
        A company secretary fraudulently hired cars for his own use without the knowledge of the managing director.
        
        A company secretary could enter into contracts in the company's name.
        
        Held: the company was liable
        
        A company secretary could enter into contracts in the company's name.
        
        Section 140 - When a person by his words or conduct implies another person as having authority to act for him
        
        Panorama Developments v Fidelis Furnishing
        A company secretary fraudulently hired cars for his own use without the knowledge of the managing director.
        
        Held: the company was liable
    - - Section 140 - written or oral form
        Singham Sulaiman v Mega Palm
        The Plaintiff claimed that the Defendants appointed him by verbal to sell lands with commission to 2%.
        The Plaintiff supplied information to clients and discovered that the Defendants negotiated directly with the buyers.
        
        Now the Plaintiff wanted to claim the fees.
        Held: The Plaintiff failed to prove a valid oral appointment existed.
        
        Held: The Plaintiff failed to prove a valid oral appointment existed.
        
        The Plaintiff supplied information to clients and discovered that the Defendants negotiated directly with the buyers.
        
        The Plaintiff claimed that the Defendants appointed him by verbal to sell lands with commission to 2%.
  - - - Illustration under Section 149
        A, without authority, buys goods for B. Afterwards B sells them to C on his own account. B’s conduct implies a ratification made for him by A.
        A, without B’s authority, lends B’s money to C. Afterwards B accepts interest on the money from C. B’s conduct implies a ratification of the loan.
        
        A, without authority, buys goods for B. Afterwards B sells them to C on his own account. B’s conduct implies a ratification made for him by A.
        
        A, without B’s authority, lends B’s money to C. Afterwards B accepts interest on the money from C. B’s conduct implies a ratification of the loan.
      - Section 149
        If the acts are done by a person but without his knowledge, he may elect to ratify or disown the acts.
        
        If he ratifies them, the same effects as if it had been performed by his authority.
        
        Section 149
        If the acts are done by a person but without his knowledge, he may elect to ratify or disown the acts.
        
        ratification
        
        the action of signing or giving formal consent to a treaty, contract, or agreement, making it officially valid.
        "ratification of the treaty raised problems in several member states"
        
        making something oficially valid by law
        
        if he ratifies them, the same effects as if it had been performed by his authority.
      - A contract can only be ratified if:
        
        The agent must have a principal who is in actual existence.
        
        The agent must at the time of the contract, expressly act as agent for the principal
        
        The act or contract must be unauthorized
        
        WHAT IS PRINCIPAL IN AGENCY LAW
        
        In an agency relationship, the principal is the person who gives authority to another, called an agent, to act on his or her behalf. In Criminal Law, the principal is the chief actor or perpetrator of a crime; those who aid, abet, counsel, command, or induce the commission of a crime may also be principals.
        
        The principal must have contractual capacity
        
        The principal must at the time of ratification, have full knowledge of all material facts.
        
        The principal must ratify the whole act.
    - - Section 142
        1.The agent’s action was necessary, in the circumstances,
        2.in order to prevent loss to the principal and
        3.it is impossible for the agent to get the principal’s instruction
        
        Section 142
        
        Section 142
        
        1.The agent’s action was necessary, in the circumstances,
        
        2.in order to prevent loss to the principal and
        
        3.it is impossible for the agent to get the principal’s instruction
      - cases on nessity for permission of principal
        
        Springer v Great Western Railway Company [1921]
        
        Springer v Great Western Railway Company [1921]
        
        1.The defendant agreed to carry the plaintiff’s tomatoes from Channel Island to London, by ship and train.
        
        2.The ship was stopped at Channel Islands for three days due to bad weather.
        
        3.When the ship arrived at Weymouth, the defendant’s employees were on strike and delayed for two days.
        
        4.Later it was discovered some of the tomatoes were found to be bad.
        
        5.The defendant decided to sell the tomatoes as they felt that tomatoes could not arrive on time in saleable condition.
        
        6.The plaintiff sued for damages. The court held that the defendant ought to communicate with the Plaintiff to get instruction when the ship arrived at Weymouth.
      - A contract can only be necessity if:
        
        1.Impossible for the agent to get the principal’s instruction
        
        2.The agent’s action is necessary to prevent loss to the principal
        
        3.
        Must BE acted in good faith
- - - - Section 164- To perform orders and follow instructions
      - Section 165 - To exercise due care and skill
      - Section 171 – to give the principal all sums received on his account
    - - Section 170 - To pay the agent the commission
      - Not to willfully prevent or hinder the agent from earning his commission
      - Section 175 -To indemnify (the agent for acts done in the exercise of his authority
    - - Keppel v Wheeler [1927] 1 KB 577
        The real estate agent failed to inform the client of a further offer to purchase. It was held that he was liable
      - Mahesan v Malaysian Government Officers Co-operative Housing Society Ltd [1978] 1 MLJ 149
        
        1.The Appellant who was a director of the Respondent bought land on behalf of the Respondent for nearly RM1m, in which the price was overvalue.
        
        2.The Appellant had received a bribe amounted to RM100k from the vendor.
        The court held that the Respondent could recover the bribe.
- - - - 1.Termination by Mutual Consent
        2.Termination by Performance
        3.Termination by Expiry
        
        Termination by Operation of Law
        5.Termination by Frustration
        
        types
        
        1.Termination by Mutual Consent
        
        When both parties agree
        Revocation by the Principal – S. 156.
        Revocation by agent – S. 159
        
        2.Termination by Performance
        
        Section 154 when it was created for a specific and it is completed
        
        3.Termination by Expiry
        
        It was created for affixed period and it ended at the expiry of that period
        
        Termination by Operation of Law
        
        Section 161 In the event of the agent/principal
        Death
        Insanity
        Bankruptcy/ Insolvent
        
        5.Termination by Frustration
        
        Happening of event that renders the agency becomes unlawful
        Such as outbreak of war