Agency and Corporation Law - Assignment

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Added on 2021-06-17

Agency and Corporation Law - Assignment

Added on 2021-06-17

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Running head: AGENCY AND CORPORATION LAWAgency and Corporation LawName of the StudentName of the UniversityAuthor Note

Agency and Corporation Law - Assignment_1

1AGENCY AND CORPORATION LAWQuestion 1:Issue:The issue in this case is related with the following facts-Whether there exists a contract between Gabby and Terrence.Whether Peter had an authority, if yes, then what was the nature of such authority?Whether Terence is liable to Gordon.Law:Under the law of agency, the relationship between a principal and an agent is formedwhen the agent agrees to act under the authorization of the principal for the purpose of creatinglegal relationship with a third party. In this regard, it is noteworthy to mention here that an agentis a person who has been authorized by the principle to deal with third persons in his absence.Therefore, in a agency relationship three parties are involved- the principal, agent and the thirdparty. It is worth noting that a principle is liable for the acts done by the agent under his legalauthorization. However, in some case the agent acts in his own personal conduct for which theprincipal is not liable. Therefore, under the common law different types of authority has beenrecognized which can be applied to the relationship between an agent and the principle. Theauthority which prevails under the law of agency can be listed as-Actual authority.Express authority.Implied authority.Ostensible authority.

Agency and Corporation Law - Assignment_2

2AGENCY AND CORPORATION LAWActual authority:It is evident that there exists a legal relationship between the principal and his agentwhich has been formed as a result of consensual agreement. It is worth mentioning the fact thatactual authority can be both express and implied. Therefore, actual authority is important to boththe agent and the principle. If an agent acts within the boundary of actual authority then he shallbe able to claim compensation or other costs while performing the agency relationship. However,the agent shall not be able to claim compensation if he acts outside the actual authority. In suchcases he will be liable to the third parties personally. The concept of actual authority can beexplained in regard to a famous case Watteau v Fenwick [1893] 1 QB 346. In this case, it wasobserved that the manager of the pub was authorized by the owner of the pub by way of actualauthority not to buy cigars. However, it is evident that the purchase of cigars was the mainauthority that was entrusted to the pub managers in England during that period. Therefore, thecourt held the pub manager not liable though he breached his actual authority.Implied Authority:An agency as a result of implied authority arises when the principal authorized the agentin his own personal conduct to carry on his duties. It is worth examining that the authorizationunder an implied authority can be divided into usual authority and customary authority. In caseof usual authority, the agents carry on the duties of their principals and the concept of customaryauthority applies in case of business usages. In Luxor (Eastbourne) v Cooper [1941] A.C. 108, itwas held by the court that an agent has the right to remuneration, if he had worked under theauthorization of the principal. Express authority:

Agency and Corporation Law - Assignment_3

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