This chapter discusses the law of agency, which is a complex, subtle, and often misunderstood subject. Understanding it is, however, important, especially given the extent to which it can affect commercial and other areas of the law. It has also been established that, for many businesses, the use of agents is invaluable, and significant areas of commercial activity could not continue without the existence of agency. Several basic foundation issues relating to the law of agency, such as the sources of agency law and the various types of agent that exist, are discussed here. The chapter begins by determining the legal meaning of ‘agency’. Unfortunately, whilst many definitions of agency exist, the concept is ‘notoriously slippery and difficult to define’, according to Bowstead and Reynolds. The chapter also looks at the various forms of agent, including the development of the commercial agent.
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3. An introduction to the law of agency
Chapter
8. The law of agency
This chapter examines the key provisions of the law of agency. It highlights the importance of agency for the business sector and explains that an agency is a specific form of legal relationship between two persons whereby one person appoints another person to act on his behalf. An agency can be created by express or implied agreement, through the agent’s apparent authority, and when the principal ratifies the purported agent’s act. This chapter also discusses the duties and rights of the principal and agent, and the relationships that exist between agent, principal, and third party. Finally, the chapter discusses the various ways in which a relationship of agency can be terminated.
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6. Relations with third parties
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
This chapter examines how contracts made by the agent affect the legal relations of the principal with regard to third parties. When considering the rights and liability arising under a contract made by an agent, it is important to draw the distinction between whether the agent was acting for a disclosed or undisclosed principal, the latter being an important feature of English agency law largely unknown to civil lawyers. This chapter discusses generally the relations between principal and third party, and between agent and third party, in the context of both disclosed and undisclosed agency.
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6. Relations between principal and agent
This chapter discusses the legal relationships that exist between the principal and agent, and, in particular, focuses on the duties that each party owes to the other. The precise scope and content of these duties will depend upon a number of factors, including whether the agency is contractual or gratuitous, whether the agent is acting within the scope of his authority, whether the agent is a specific type of agent upon whom extra duties are placed, and whether the agent is a commercial agent or not. There are legal relationships that can exist between the three parties involved in a typical legal relationship, namely, the relationships between principal and agent, between principal and third party, and between agent and third party. The chapter begins by discussing the duties that an agent owes to his principal.
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7. Relations between principal and third party
This chapter examines the relationship that exists between principal and third party, focusing in particular on the liability that exists between principal and third party, and those instances when they can sue, and be sued by, the other. Liability principally arises in contract and tort, and so these two areas of liability will be discussed, beginning with the contractual liability of the principal and third party. The contractual relationship between the principal and third party, and the extent to which one party can be liable to the other, can be complex and depends upon a number of variables, notably whether the principal is disclosed or undisclosed. In a typical agency relationship an agent will effect a contract between his principal and a third party, after which the agent will ‘drop out’ of the transaction.
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18. Businesses and the Responsibility to Agents
This chapter identifies agency relationships, their prevalence in business, and how the agency exists to bind the principal in contracts with third parties. It begins by defining agency as 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 to strangers to the relationship by the making of contracts or the disposition of property. Agencies exist in corporate organizations, sole trader, and partnership trading structures, and the law in this area applies to many relationships and is frequently seen in commercial enterprises, including high street retailers, between partners, and the directors of a corporation.
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5. Creation of agency, and the authority of the agent
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
This chapter focuses on the creation of the principal–agent relationship and the authority of the agency and the four ways of creating it: through an express or implied agreement between the principal and the agent; under the doctrine of apparent authority; by operation of law; and through ratification of an unauthorised agent’s acts by the principal. Agency arising out of agreement will always be consensual, but it need not be contractual. After explaining how the agency relationship is created, the chapter examines the authority of the agent such as actual authority, apparent authority, and usual authority.
Chapter
7. Relations between principal and agent
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
This chapter focuses on the rights and obligations of the principal and the agent between themselves, whether arising from a contract between them or from the fiduciary nature of their relationship. However, those rights and obligations may also derive from other sources, for example tort, statute, or the law of restitution. There is detailed consideration of the duties of the agent, such as the duty of care and skill and fiduciary duties, as well as the rights relating to remuneration, reimbursement and indemnity, and lien. The chapter also discusses the ways by which agency may be terminated.
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12. The creation of agency and the agent’s authority
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter focuses on the creation of agency and its three main parties: the agent, the principal, and the third party. The primary purpose of the agent is to bring the principal and the third party into direct contractual relations, with the principal taking on the rights and liabilities created by the contracts, provided the agent had authority to act. The chapter looks at several kinds of agent’s authority, including actual authority, apparent authority, and usual authority, and also considers agency of necessity as well as cases where the principal may ratify a transaction.
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13. The relationships created by agency: the rights and liabilities of the parties
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter focuses on the relationships created by agency, namely, the rights and liabilities of the agent, the principal, and the third party. It first explains disclosed agency as opposed to undisclosed agency with regard to the contract made by the agent, and then, after discussing the rights and liabilities of the principal and the third party, considers the rights of the agent against their principal, including remuneration, indemnity, and lien. The chapter examines the agent’s two kinds of duty to their principal (contractual duty and fiduciary duty) and discusses remedies for breach of fiduciary duty and how an agency may be terminated as well as the effects of termination. It concludes by highlighting the provisions of the Commercial Agents (Council Directive) Regulations 1993.
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5. The authority of the agent
This chapter explores the authority of the agent. It tackles the interplay of authority between an agent, a principal, and third parties, and the distinction between actual and apparent authorities. In most cases of apparent authority, the ‘principal’ makes a representation that the ‘agent’ has authority which the third party relies upon by entering into a contract. In certain circumstances, a person who acts in an emergency to preserve the property or interests of another may be treated as an agent of necessity regardless of the principal's absent consent. The chapter then overviews the impact of ratification on the rights and liabilities of third parties.
