LAW OF AGENCY
-PART II-
Contents
01
Definition and types of Agents
02
Creation of Agency
03
Duties of Principal and Agents
04
Termination of Agency
Agency by Ratification
Conditions:
i.An agent duly appointed but has exceeded his authority
ii. A person who has no authority to act for the principal but has acted as
if he has the authority
S 149 CA- The Principal may accept or reject the contract made
S 150 CA- Ratification may be expressed or implied
Hatman v Hornsby:
“the approval by act, word or conduct of that which was
attempted of accomplishment, but was improperly or
unauthorizedly performed in the first instance”
A Contract can only be ratified under the following circumstances
1. The act/contract must be unauthorized
2. Unauthorized act recognized by law
3. The Agent at the time of contract must expressly act as Agent for th
e PrincipalS 149 CA
Case: Keighley Maxted & Co. v Durant
In this situation- a person without the authorization of P
enters into a contract with a third party on behalf of the P.
Ratification occurs when the P expressly accepts the contra
ct
later.
Effect- Actions of agent is valid
4. Principal must be in existence and capable of being ascertained,
when contract is made-s 151
Case: Kelner v Baxter
5.The Principal must have contractual capacity at the time of
ratification- S 13
6. The Principal must have full knowledge of all
material facts
7. The whole contract/ act must be ratified- S 152
8. The ratification must not injure a third party- S 153
Agency by Necessity
Principal/Agent relationship created despite there being no
agreement. Due to emergency-one person acts to protect
the interest of another
3 conditions to be met:
1. It is impossible for the A to get the P’s
instructions
Great Northern Railway v Swaffield
Springer v Great Western Railway
2. The A’s action is necessary to prevent loss
to the Principal.
3. A acted in good faith
Necessity arises when act is in genuine interest of the Principal
Agency by Estoppel
Also known as ‘agency by holding out’
Occurs when there is no actual Principal/agent relationship,
but action by Principal makes a third party thinks that is one.
A person is estopped (stopped)/ precluded from denying th
e existence of that person’s authority to act on his behalf.
P is bound by act of so called “agent”.
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