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.
Chapter
6. Relations with third parties
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
Chapter
3. Bailment
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
This chapter deals with bailment, defined as a transaction under which a bailee lawfully receives possession of goods from a bailor for some purpose. Examples of bailment from commercial law include warehousing, carriage, the deposit of property to have work done on it, leasing, and pledge. A buyer under a sale or return transaction is, pending acceptance or rejection, a bailee of the goods. After explaining what a bailment is, the chapter considers types of bailment and three requirements for a bailment: transfer of possession; ownership remaining in the bailor, or at least not passing to the bailee; and consent by the bailee. It then examines the bailee’s liability and the burden of proof with respect to bailment before concluding with an analysis of bailment involving third parties, focusing in particular on sub-bailment.
Chapter
26. Non-possessory security
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
This chapter focuses on non-possessory security. It begins with a discussion of mortgages and their definitions. A mortgage involves the transfer of ownership of property from the mortgagor (the debtor or a third party) to the mortgagee (the creditor) as security for a debt or other obligation. The chapter then considers equitable charges and their definition, which include fixed and floating charges, before moving on to consider equitable liens. The chapter also examines statutory control with respect to non-possessory security, with particular emphasis on the protection of third parties and debtors.
Chapter
27. Bills of lading and contracts of carriage
This chapter focuses on the key concepts of bills of lading and contracts of carriage. It highlights the importance of contracts of carriage since goods sold to an international sale contract need to arrange transportation to particular destinations. Goods are often carried under a waybill contract under which the carrier undertakes to deliver the goods to a named consignee at the port of destination. The chapter considers the bill of lading as a document of title, as evidence of the contract of carriage, and as a receipt before listing alternatives to bills of lading. It also looks into tort claims against third parties and claims against the carrier.
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
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.
Chapter
12. The constitution of the company: dealing with outsiders
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 explores the legal aspects of transactions made with those outside the company (called outsiders or third parties), with emphasis on how they are determined to be legitimate and binding on the company. It also discusses the ultra vires doctrine and the three particular issues that make it a very tricky problem for the courts; the inclusion of the benefit of the company criterion to the ultra vires issue; the reform of ultra vires; and the application of the general principles of agency in determining whether the company is bound by a particular transaction. The chapter concludes by analysing reforms in the Companies Act 2006 concerning the authority of directors to bind the company or authorise others to do so.
