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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Chapter
3. An introduction to the law of agency
Chapter
15. Privity of Contract Under the Law of Agency
M P Furmston
This chapter discusses the law on contracting through agents. It covers the place of agency in English law; the formation of agency; the position of principal and agent with regard to third parties; unauthorized acts of the agent; and termination of agency.
Chapter
7. Privity of contract and third party rights
Robert Merkin KC, Séverine Saintier, and Jill Poole
Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. According to the doctrine of privity of contract, only the parties to the contract are bound by, or can enforce, the obligations under the contract. A person who is not a party to a contract does not have any rights under that contract and is not subject to any of its obligations (or burdens). This chapter considers the rules of contract law, and related rules, that are applicable to contracts which stipulate third party rights. It considers the relevant provisions of the Contracts (Rights of Third Parties) Act 1999, the scope of the legislative reform, the test for third party enforceability and how the doctrine of privity of contract is related to the consideration requirement. It also looks at means of circumventing the privity doctrine such as assignment, and exceptions to the privity doctrine such as agency principles as employed in The Eurymedon. The chapter then examines remedies available to the promisee which have the effect of enforcing any promise in favour of a third party beneficiary or enabling substantial damages to be recovered to cover the third party’s loss. Finally, the means by which contractual burdens may bind third parties are examined.
Chapter
4. Agency
This chapter focuses on the nature of agency before considering the role of agents. It highlights the vital role agents play in commercial activity as they become the middleman in everyday life. The primary role of agents in commerce revolves around the negotiation and conclusion of contracts. The chapter acknowledges that most developed legal systems recognise the concept of agency and that there is a marked similarity between the rules of different legal systems. It looks into the relationships created by agencies by considering the relationships and interplay between an agency, a third party, and a principal in different circumstances.
Chapter
6. Relations with third parties
This chapter focuses on third parties. It specifically looks at the differences between disclosed and undisclosed agencies. The agency is disclosed where the agent reveals that they are acting as an agent; the agency is undisclosed where the agent does not reveal the fact of the agency at all and purports to be acting in their name and on their behalf. The chapter then discusses the agent's warranty of authority to the third party who contracts with the agent's principal. It considers the liability for misstatements as any misrepresentation may give the representee a right to rescind any contract made in reliance on it.
Chapter
7. Principal and agent
This chapter highlights the relationship between principal and agent. It explains that the consent of the principal gives the agent their authority. Principals and agents have certain rights against each other which spring from their agency relationship, most of which may be contractual. The Commercial Agents (Council Directive) Regulations 1993 created rights and obligations for the parties involved in the commercial agency agreement. The chapter then looks at the rights and duties of the agent under general common law. It explains that the withdrawal of consent by either party effectively terminates their relationship and the agent's actual authority to bind the principal.
Chapter
11. Bare trusts subject to contractual obligations and agent’s instructions
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter discusses a type of bare trust known as a nomineeship. Under a bare trust, a trustee holds property for a beneficiary on no specific trust terms; the trustee’s only obligation is to transfer the property to the beneficiary or to a third party as the beneficiary directs. Nomineeships typically combine the bare trust with a contract or relationship of agency. The first kind of nomineeship discussed is the solicitor-agent trust, followed by the Quistclose trust, and finally, unincorporated association trusts.
Chapter
2. Understanding trusts
Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. There are many kinds of trusts performing different functions. Private family trusts of the orthodox type are different from special trusts such as pension trusts and charitable trusts, and the so-called ‘NHS trust’. The diversity of functions performed by trusts explains why there is diversity within the law of trusts. This chapter provides an overview of trusts, including their usefulness, how they differ from other legal concepts (contracts, debt, powers, agency), the different trust types, the role of trusts in asset protection and the social significance of trusts. It looks at special categories of trusts and trustees, including bare trusts, protective trusts, pension fund trusts and asset protection trusts.
Chapter
2. Companies and Corporate Personality
The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter considers the main legal forms used for businesses in the UK—particularly sole traders, general partnerships, limited liability partnerships (LLPs), and companies (public and private). It then examines how registered companies limited by shares come into existence. On registration a company becomes a legal person, separate from its shareholders and directors. This chapter explores this ‘corporate personality’ and the popular topic of when the ‘veil of incorporation’ can be lifted or pierced by statute or the courts.
Book
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. Commercial Law Concentrate is supported by extensive online resources to take your learning further. It has been written by experts and covers all the key topics so you can approach your exams with confidence. The clear, succinct coverage enables you to quickly grasp the fundamental principles of this area of law and helps you to succeed in exams. This guide has been rigorously reviewed and is endorsed by students and lecturers for level of coverage, accuracy, and exam advice. It is clear, concise, and easy to use, helping you to get the most out of your revision. After an introduction to contracts of the sale of goods, the book covers: statutory implied terms; passing of property and risk; retention of title clauses; exclusion and limitation clauses; non-existence and perishing of goods; transfer of ownership by a non-owner; delivery, acceptance, and payment; remedies of the unpaid seller; remedies of the buyer; consumer credit; the creation of agency and the agent’s authority; and the relationships created by agency—the rights and liabilities of the parties.
Chapter
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.
Chapter
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.
Chapter
4. Privity and third party rights
James Devenney and Adam Shaw-Mellors
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 discusses the doctrine of privity and third party rights. The doctrine of privity of contract provides that a person who is not a party to a contract (called a ‘third party’), cannot acquire rights under or enforce the provisions of that contract or rely on its protections even if the provisions were intended to benefit that third party. At common law there are complex, and sometimes artificial, ways to avoid this conclusion. More significant nowadays is the attempt to reform this principle by legislation in the Contracts (Rights of Third Parties) Act 1999, allowing some third party beneficiaries to enforce the provisions of contracts.
Book
James Marson and Katy Ferris
Business Law provides an introduction to the subject. Packed with up-to-date and relevant examples, it demonstrates the real applicability of the law to the business world. The book is split into eight parts. After an introduction about studying the law, Part 2 covers the English legal system, the constitution, EU law, and human rights. This comprises important issues including statutory interpretation and the legislative process, and court structures. Part 3 considers contractual obligations. Here terms such as, contractual capacity, mistake, misrepresentation, duress, contractual terms, regulations, and remedies for breach are discussed. Part 4 discusses tortious liability and describes issues of negligence, nuisance, economic loss, psychiatric injury, and statutory duties. Part 5 examines company law, including trading structures, maintenance of finance and capital, and corporate administration and management. Part 6 explores the employment relationship, the nature of which will determine many important factors for both the individual and the employer. It includes discussions on the Contract of Employment, statutory regulation of dismissals, equality in employment relationships, and Statutory and Common Law Regulation of the Conditions of Employment. Part 6 then discusses agency law and the duties and responsibilities that exist for both principal and agent. Finally, intellectual property and data protection issues are considered in Part 8.
Book
David Fox, Roderick Munday, Baris Soyer, Andrew Tettenborn, and Peter Turner
All books in this flagship series extract key cases, legislation, and academic debate, providing students with an invaluable resource. This new edition includes discussion of new legislation, including the new Insolvency Act 1986, ss 263H–263O; the Payment Services Regulations 2017; the Electronic Presentment of Instruments (Evidence of Payment and Compensation for Loss) Regulations 2018; and the Business Terms (Assignment of Receivables) Regulations 2018. In addition it discusses new case law such as Glencore International AG v MSC (on personal property law and shipping documents); Volcafe Ltd v Cia Sud Americana de Vapores (on bailment); Kaefer Aislamientos v AMS Drilling Mexico, Bailey v Angove’s Pty, and Banca Nazionale del Lavoro v Playboy Club (on agency); PST Energy 7 Shipping v OW Bunker Malta, Bajaj Healthcare v Fine Organics, Gunvor v Sky Oil & Gas, and Euro-Asian Oil SA v Crédit Suisse AG (on sale of goods); The Erin Schulte and Taurus Petroleum v State Oil Company (on trade finance); BP Oil International v First Abu Dhabi Bank (on assignment); Haywood v Zurich Insurance, The DC Merwestone, and Axa Insurance UK v Financial Claims Solutions (on insurance); and Jetivia SA v Bilta (UK) Ltd and JSC BTA Bank v Ablyazov (on insolvency). Other developments are also covered, such as the proposed reform of bills of sale recommended in the 2017 Law Commission report on Bills of Sale. The book contains a new introductory section on the likely detailed impact of Brexit on English commercial law.
Chapter
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.
Chapter
8. Introduction and definitions
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
This chapter serves as an introduction to the English law governing sale of goods, along with relevant definitions. It introduces the common law of sale of goods and its subsequent codification by the Sale of Goods Act 1893, later consolidated in 1979 and which (following further minor amendments) is now the principal source of the law. It also considers some key definitions relating to sale of goods, before discussing the nature of a sale and how it differs from related transactions such as barter or exchange, bailment, agency, and hire-purchase.
Chapter
19. Acting for a company: agency and attribution
This chapter deals with the legal relationship of agency that exists between the company and the agent, explaining the process involved in an agent’s authentication and the execution of documents for the company they represent. It considers two ways in which a company may become contractually bound to another person (a ‘contractor’) under the provisions of the Companies Act 2006: through a written contract to which the company’s common seal is affixed, or when someone has made a contract on behalf of the company. It also discusses the company’s capacity to enter into contracts, including the ultra vires rule, and attribution by a court so as to impose criminal liability on a company. A number of court cases relevant to the discussion are cited.
Chapter
4. Privity and third party rights
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 discusses the doctrine of privity and third party rights. The doctrine of privity of contract provides that a person who is not a party to a contract (called a ‘third party’), cannot acquire rights under or enforce the provisions of that contract or rely on its protections even if the provisions were intended to benefit that third party. At common law there are complex, and sometimes artificial, ways to avoid this conclusion. More significant nowadays is the attempt to reform this principle by legislation in the Contracts (Rights of Third Parties) Act 1999, allowing some third party beneficiaries to enforce the provisions of contracts.
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