Business Law: Agency, Usual Authority, and Separate Legal Entity

Running Head: BUSINESS LAW
BUSINESS LAW
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Author Note

1BUSINESS LAW
ANSWER 1
RELATIVE ISSUE
The question in context is relating to the part with whom Gaby has entered into a contract.
Whether the party is Terence or Sara
THE LAW
In the scenario, the law which is related to the agency is applicable. Agency refers to a
relationship between two parties in which one is in total control of the other. It is an agreement,
in which principal pieces of advice the authority in relation to the dealings with added third
parties then demonstrating that principle by means of contract by those third parties towards the
agent.
It is specified that whether or not the principal was obligated by the behavior of the agents is
reliant on whether he has assigned the authorities to the agents. However, in regards to the
doctrine of an undisclosed principal, it is certain that third parties have the right to determine
from whom it can claim the achievements(Busch, Macgregor & Watts, 2016). Such Doctrine
regarding the election has been recognized in the case of Yin Kwan v, Eastern Insurance Co Ltd
[1994] 2 AC 199 It is declared that in those circumstances, where the third parties had no
knowledge regarding the agents that they were acting on the side of the company, the agents
have the right to choose from where they require requesting the performance. But, discussing

2BUSINESS LAW
regarding the applications of the above-mentioned doctrine, third parties need to be in a contract
accompanied by the agent itself assuming that he was performing on his own sides, on the point
that this agent had a specific expertise.
APPLICATION
It is brought up by the facts in relation to this case that Sara was selected by the Terrence as a
designer of the jewelry. It refers to that authority to perform on behalf of Terrance, which can be
believed to be indirect in the case. Sara showed her jewelry designs to Gaby. Gaby requested
Sara to design the brooch costing thousand dollars for her. Therefore, according to the
applications under the doctrine of election regarding the case of undisclosed principals as
believed in the case of Hugh Stevenson and Sons, Ltd v Aktiengesellschaft Für Cartonnagen
Industries [1918] UKHLJ0125-4, it is declared that Gaby has the right to demand action in
regards to the contract made between him and Sara, and she was unaware of the fact that Gaby
was working as an agent for Terence.
CONCLUSION
Hence completing this, it is mentioned that Gaby had the right to select the demand performance
from Terence or Sara. But, she has been given the honor to administer the contract created
against Sara and also demand performance by her.
SECOND ISSUE

3BUSINESS LAW
This issue states whether Terrance will have the liability of paying Mary
THE RULES
The principles regarding usual authorities are suitable in the scenario mentioned associate Peter,
Mary and Terrance. Typical authorities were held up for being identical with the implied
authorities likely in case of Hely-Hutchinson v Brayhead limited [1968]. It is also declared that
those implied authorities are appraised by the courts itself, to be consulted with the agent through
the principal as to satisfy the responsibilities which require being conferred over them by the
express authority. Such an example regarding the usual authority has been studied in case of
Watteau v Fenwick [1863] which stated that the bar owner was responsible for the payment of
the cigars, however, the manager of the bar was instructed by him not to purchase cigars
(Loewenstein & Hillman, 2018). It was declared that the principal will have to be responsible for
acts of the agents which takes place in the scope of the authorities which are normally consulted
nevertheless on how the limitations are.
APPLICATION
Therefore, after analyzing the facts in relation to this case it is identified that Peter assigned the
authorities to perform as the supply purchaser under Terence. Meanwhile, Terence had refused
Peter that he will not buy gold because they had the high supply of gold. But, a contract was
made between Peter and Mary who was the gold dealer responsible for the transactions with