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chapter 4 law of agency PDF

Added on - 22 Jan 2022

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Chapter 4
LAW OF

AGENCY
What you will learn?
4.1Ascertain nature of agency
4.1.1Define law of agency
a. principal
b. agent
4.1.2 Explain formation of agency by way of:
a. express appointment
b. implied appointment
c. ratification
d. necessity
e. estoppel
4.2Discuss types of agency
4.2.1Interpret types of agency by function
a. broker
b. factor
c. commission agent
d. delcredere
e. powers of attorney
4.2.2Interpret types of agency by authority
a. actual
b. apparent
4.3 Demonstrate the relationship between
principals and agents

4.3.1 Apply rights and duties of an agent
toward his principal

4.3.2 Apply rights and duties of a
principal toward his agent

4.4 Outline termination of agency
4.4.1 Explain termination of agency
Reference: Contract Act 1950
Assessments: Quiz 2 & End Of
Chapter
AGENCY ACCORDING TO JURISDICTION /
SCOPE OF AUTHORITY

S139the authority of an agent may be expresses or implied
i.
S140-Express/ actual authority
authority given expressly in oral or writing
Also exist in the following circumstances
a
-all such power or acts are necessary or proper to execute the express
authority

b
-the circumstances of the case
c
-the custom or usage of trade and
d
-the situation and conduct of the parties
ii.
Implied/ apparent authority
Authority not expressly given but may be presume to exist and the
principal is liable for the act of the agent

i.
By the words or conduct of the principal leads 3rdparty believed the
agent has authority

ii.
The agent had authority to act but was terminated by the principal
without notice to 3
rdparty
RIGHTS AND OBLIGATIONS
OF PRINCIPAL

1. Pay agent commission

S172an agent should not be prevented form receiving his commission unless the
agency relationship is gratuitous

Dolphin v Harrison, San Miguel Pty Ltdthe Principal is only obliged to pay the
agent if the agent complied with the term of the agency agreement and when the agent

has earned the payment

2. Not to prevent agent to earn commission by what ever means.

3.To indemnify and reimburse the agent for acts done in the exercise of his duties provided

a)
Where the agent has incurred losses or liabilities in performance of the contract of
agency

b)
Where the agent causes injury to 3rdparty in execution of his authority of agency
c)
Where the agent suffers injury during the cause of his duty due to the principal’s
negligent or want of skill
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