Liability of Swimmingpool Co for Actions of Martin

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Part A
Issue
The facts of the case presence the issue regarding the liability of Swimmingpool Co with
respect to the actions of Martin. Whether the company is entitled to deny liability for the acts
of Martin based on the contention that Martin has failed to follow their instructions. Whether
any laws has been violated by Martin in in making a plan for setting up his business similar to
that of the company he has been employed with.
Rule
The relationship of agency is said to have existed when a person delegates his tasks to
another where the person so delegated has the power to represent the person delegating in
front of a third party. The person who has been represented by the agent is required to be held
liable for all such transactions that are affected by the agent under the authorisation extended
by the person who is delegating. This can be explained with the principles established in the
case of Tooth v Laws (1888) LR (NSW) 154.
The principal authorising an agent to act on his behalf need to carry all the liabilities that
accrues by virtue of the relationship of agency in relation to those transactions carried out by
the agent in the furtherance of the authority extended. This can be best explained with the
case of Australia and New Zealand Bank Ltd v Ateliers de Constructions Electriques de
Charleroi (1966) 39 ALJR 414. Any e principle, who has delegated the agent with the power
to represent him in certain transactions and the agent acted with respect to the same, restrains
the principal from refusing to accept the liability of any dispute that search action of the agent
under the authority results into. This kind of authority is referred to as express authority and
can be supported with the case of Ireland v Livingstone (1872) LR 5 HL 395.

2BUSINESS LAW
The tortious actions committed by an agent while acting within the scope of the authority
conferred upon him by the agency is to be borne by the principal with respect to the liabilities
so incurred. For holding the principal liable under such conditions the actions of the agent
needs to be established to have been carried out within the precincts of the scope of the
authority conferred. In case the liability can be evident being acts of the agent within the
purview of the agency authority, the principal will be required to make good all the damages
caused to a third person for such a tortious act. This can be best explain with the case of
Deatons Pty Ltd v Flew [1949] HCA 60.
Again, instances where the agent has been expressly acting outside the authorisation
extended by the principal entitle the principal to deny liability for the acts of the agent
exceeding the authority. The principal will not be held liable for any actions of the agent
which violates the express instructions of the principal. This needs to be discussed with the
case of Shaddock v Parramatta City Council (1981) ALR 385.
The agency relationship creates a fiduciary duty that the agent owes towards principal and
should reflect in all his actions the best interest pertaining to the principal. This can be
supported with the case of Hewson v Sydney Stock Exchange Ltd (1967) 87 W N. The agent is
required to follow the instructions pertaining to the task that has been conferred upon him by
the principal. This can be supported with the case of Mitor Investments Pty Ltd v General
Accident Fire E Life Assurance Corp Ltd [1984] WAR 365.
The agent is not permitted to accrue any profit personally from the endeavours that he has
been carrying out under the authorisation of and on behalf of the principal and every such
profit is required to be furnished and remitted to the principal. This can further be supported
with the case of Regal (Hastings) Ltd v Gulliver [1942] UKHL 1.