Chapter_6_-_Law_of_agency.pptx

Chapter_6_-_Law_of_agency.pptx - BUSINESS LAW Chapter 6 LAW...

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BUSINESS LAW Chapter 6 LAW OF AGENCY
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LEARNING OUTCOME How to create an agency relationship? What are types of authority an agent may have? What are the duties and rights of agent as against the principal and vice versa ? In what situations will agency come to an end? 2
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Introduction An agency RELATIONSHIP exists when one person [the AGENT ] acts / has power to make contracts ON BEHALF of another [the PRINCIPAL ] with a third person [the THIRD PARTY ] 3
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Qui facit per alium facit per se: S/he who acts through another is deemed to act in person PRINCIPAL AGENT THIRD-PARTY CONTRACT IS MADE BETWEEN PRINCIPAL AND THIRD-PARTY 4
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INTRODUCTION Governed by Part X Contracts Act 1950. Definition of agent (A) - S.135. Definition of principal (P) – S.135. There are two contracts i.e. P and A; P and 3 rd P. 5
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Who is an agent? Who may be an agent?S137- any person but not a minor or unsound person Consideration not required – S.138. The meaning of an agent in legal sense is different from its commercial sense. To determine the existence of agency the court will look at the authority given to the agent. Sec 136-a P must not be a minor of sound mind 6
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Who is an agent? The agency contract can be made verbally There is no requirement that the agency contract has to be in writing This was confirmed in the case of KGN Jaya Sdn. Bhd. v. Pan Reliance Sdn. Bhd. [1996] 2 CLJ 611 In this case, the court held that the law does not require that an agency or sub-agency agreement must be in writing 7
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CREATION OF AGENCY Express appointment – S.140. Implied appointment – S.140 [every partner is an agent of another partner - S.7 PA 1961]. Ratification – S.149. Necessity – S.142. Estoppel/holding out – S. 190. 8
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IMPLIED AGREEMENT EXPRESS AGREEMENT HOLDING OUT/ ESTOPPEL OPERATION OF LAW RATIFICATION CREATION OF AN AGENCY 9
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1-By express appointment No special form required Can be made orally or in writting If the authority is under seal, need to made under a Power of Attorney which is registered at High Court 10
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2.By implied appointment When a person by his word of conduct hold out a person to be his agent (holding out) Eg: A held out that he is B’s partner. C believed it and supplied good to B. B did not pay. C has right to sue both-see Illustration to Sec 140 Relationship between husband & wife. -it is presumed that wife has authority to plegde her husband’s credit. -this is still rebuttable if the husband prove otherwise Sec.7 of Partnership 1961- a partner is a partner to the other partner when contracting in the course of the partnership business 11
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3.RATIFICATION Two situations. Agent who was appointed exceeded his authority. Person has no authority, acted as if he has the authority.
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  • Spring '14
  • Business Law, Ostensible Authority, apparent authority, • Authority

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