BULAW1503 Commercial Law and Agency Law Assignment
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Commercial Law (BULAW1503)
Added on 2020-04-01
BULAW1503 Commercial Law and Agency Law Assignment
Commercial Law (BULAW1503)
Added on 2020-04-01
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AGENCY LAW2ContentsQuestion 1........................................................................................................................................3Issue.............................................................................................................................................3Rule..............................................................................................................................................3Application...................................................................................................................................6Conclusion....................................................................................................................................7Question 2........................................................................................................................................7Introduction.................................................................................................................................7Manner of Agency creation.........................................................................................................7Conclusion....................................................................................................................................9References.....................................................................................................................................10
AGENCY LAW3Question 1IssueThe main issue which becomes clear from the case study presented here is whether or not the work done by Kevin is binding upon Mudkey, on the basis of different aspects of agency law, particularly with reference to the authority given to Kevin. RuleAgency law refers to such a law, whereby the principal is made liable for the work undertaken by the agent, to a third party. The reason for holding the principal liable for the work of the agent is due to the fact that the agent works on behalf of the agent. So, the agent represents the principal in front of a third party (Busch, Macgregor & Watts, 2016). And a deal made with the agent is deemed to be a deal made with the principal. The rationale behind making the principal liable towards the third party stems from the need of protecting the third party, as they are not aware about the magnitude of authority given to the agent and also not about the relationship between an agent and their principal (Munday, 2010). Broadly, there are two kinds of authority which are given to the agents in the nation; these include the actual authority and the apparent authority. The first category of authority is one where the actual authority is given to the agent. And it can be classified into express or implied authority. In the former one, the authority is given to the agent in an express manner, and in the latter, the authority is given to the agent in an implied manner. So, either the
AGENCY LAW4authority is given by being exactly told to do so, or by implying the same through actions (Murdoch, 2014).Apparent authority, or as is otherwise known as the ostensible authority, a perception isformed before the third party which leads them to believe that the agent has the required authority to act on behalf of the principal and to undertake a particular task, where the reality is that such an authority is never granted to the agent. There are a number of cases which help in establishing this concept more clearly (Patterson Law, 2012). Watteau v Fenwick [1893] 1 QB 346 is the most common case, where it “Humble” operated the beer house in which the plaintiff was supplier of the cigars. The business operatedunder Humble’s name and also the sign displayed his name (McKendrick & Liu, 2015). Once the interest had been assigned to the defendant by “Humble”, the supply of cigars was continued and “Humble” remained the manager of the beer house. Though, “Humble” was not aware of the participation of Fenwick as “Humble” did not have the requisite authority to work for Fenwick and to represent him as an agent. Upon the non-payment, Fenwick was sued as the principal for 25 pounds and this case was made by Watteau, the third party. It was held by the county court that Humble had the required general authority and the defendant had to be made liable for the claims made by the plaintiff (Smith, 2012).Another noteworthy case is that of Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 4. The defendant in this case held the position of director in the company and started a legal battle with the plaintiff for the undertaken architect work for which the fee was unpaid. Even though Shiv Kapoor, the director in question, was not
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