Commercial Law- Agency in Australia: Formation, Operation, and Termination

This article discusses the formation, operation, and termination of agency relationships in Australia under Commercial Law. It explains the duties and rights of agents, third parties, and principles. It also explores the three forms of authority and liability in agency law. The article highlights the importance of implied authority and how it can extend actual authority provided in agency law.

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ommercial a A encC L w- g y
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ommercial a A encC L w- g y
n A tralia t e ommon a applie in man a pect e peciallI us , h C L w s y s s s y en it relate to de ininwh s f g
o an a ent i An a ent i de ined a an indi id al it t e a t orit to a ect or createwh ‘ g ’ s. g s f s v u w h h u h y ff
le al relation t at ind t ird partie and a principle A c ommon a ide t eg s h b h s . s su h, C L w gu s h
ormation o an a enc relation ip it operation a ell a termination T e la al of f g y sh , s s w s . h w s
tip late t e d tie and ri t o an a ent t e t ird part and al o t e a ent T ere ares u s h u s gh s f g , h h y s h g . h
tat te ic re late t e acti itie o a ent and t e mainl incl de t e tate A ents u s wh h gu h v s f g s h y y u h Es g s
Act A ction ale Act on mer redit Act ood Act Tra el A ent1980, u S s 1958, C su C , 1995, G s 1958, v g s
Act and n tr ment Act T e e le i lation are all in t e ictorian e i lation1986 I s u s 1958. h s g s s h V L g s .
Accordin to t e A tralian a t e ord principle i de ined a an indi id al o i e ang h us L w, h w ‘ ’ s f s v u wh g v s
a ent t e a t orit to per orm d tie on i e al A c t e principle empo er ang h u h y f u s h s b h f. s su h, h w s
a ent to a ect le al ri t or create le al ri t and d tie et een im and a t ird partg ff g gh s g gh s u s b w h h y.
A t orit and a enc can e ormed t ro t e e ta li ment o a contract ic can eu h y g y b f h ugh h s b sh f wh h b
done orall implied or e en ritten ati ication i al o a met od t at can e ed o tery, v w . R f s s h h b us , (F s
t i al o e ential to note t at a contact can e ormed e toppel e peciall in a2017). I s s ss h b f by s s y
it ation ere a t ird part elie e a relation ip i in e i tence n ome it ations u wh h y b v s sh s x s . I s s u s,
emer encie ri e ence t e e o nece it and a c implied or e pre a t orit ig s s h h us f ss y s su h, x ss u h y s
needed T ro t e action o an a ent t e principle ecome lia le a lon a t e a ent i. h ugh h f g , h b s b s g s h g s
actin it in t e con ine o t e contract oirna i et alg w h h f s f h , (W sk . 2017).

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T e la o a enc al o i li t o a principle i lia le en t e contract i till in orce th w f g y s h gh gh s h w s b wh h s s f . I
i clear t at t e act al a t orit o an a ent i e pre l recei ed rom t e principle ands h h u u h y f g s x ss y v f h
lia ilit in t i ca e are trai t or ard n t e ot er and t e implied a t orit t at ib y, h s s , s gh f w . O h h h , h u h y h s
eld an a ent eca e e carrie a t orit rom a principle ence ma in it a indinh by g b us h s u h y f h k g b g
a reement t o le trai t or ard c ter et al To p t t i into per pecti eg , h ugh ss s gh f w , (S hus . 2018). u h s s v ,
t e implied a t orit t at i al a a i ned i a ma or element ro t into li t e peciallh u h y h s w ys ss g s j b ugh gh s y
a ter t e re er al o a co rt deci ion made in a o t ale preme o rt a ter an appealf h v s f u s S u h W s Su C u f .
A tralia and e ealand an imited er Atelier de con tr ction electri e deus N w Z B k L v sus s s u s qu s
arleroi A n t i ca e it a decided t at a reliance on implied act alCh [1969] 1 C 86. I h s s , w s h u
a t orit a ri t ence t e a ilit o an a ent to endor e c e e elon in to Atelieru h y w s gh h h b y f g s h qu s b g g s.
nitiall t e Atelier ad een a arded dama e a ter an a ent ad endor ed c e eI y, h s h b w g s f g h s h qu s
made elio an A tralian a entby H s- us g .
t i al o ort notin t at t ere are trin ent r le t at protect o t ider o a e orI s s w h g h h s g u s h u s s wh h v
ma e deal it companie c a r le incl de t e r le in t e ca e o o al riti ank s w h s. Su h u u s h u h s f R y B sh B k v
T r and A c a ent a e t e a t ori ation to act n t i ca e it a eld t atu qu . s su h, g s h v h u h z . I h s s , w s h h
per on o are ta ed to cond ct certain ine e and d tie on e al o accompan ins s wh sk u bus ss s u s b h f f y g
are in t e ri t pat a lon a t e e act are done in accordance it t e article oh gh h s g s h s s w h h s f
a ociation and ot er re lation o ernin t e compan or ine ri t T ess h gu s g v g h y bus ss, (W gh 2017). h
main i e ere i et er t e act are con i tent it t e re lar operation o t essu h s wh h h s s s w h h gu s f h
company.
T ere are d tie t at a ent a e to per orm on e al o principle To tart it it ih u s h g s h v f b h f f s. s w h, s
e ential or an a ent to act in ood ait it t e intere t o t e compan ein at eartss f g g f h w h h s s f h y b g h .
n a it ation ere a con lict o intere t i ore een an a ent a to ta a a rom t emI s u wh f f s s s f s , g h s s y w y f h

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and olel a e ard t e compan intere t t i al o ort notin t at a ent are elds y s f gu h y’s s s. I s s w h g h g s h
lia le or reac o contract A t orit i one o t e tren t t at an a ent i con erredb f b h f s. u h y s f h s g hs h g s f
it te art and ilin A c all acti itie and o li ation e participate in aw h, (S w S k 2018). s su h, v s b g s h s
ind t e principle directl e peciall en t e e acti itie are done it t ird partie T reeb h y, s y wh h s v s w h h s. h
orm o a t orit e it and t e incl de act al a t orit rati ied a t orit and apparentf s f u h y x s h y u u u h y, f u h y,
a t oritu h y.
Act al a t orit rt er con i t o implied a t orit or e pre a t orit T e con en alu u h y fu h s s s f u h y x ss u h y. h s su
a reement i t e main recipe or a t orit and a c t e main i e t at ma ari e ig s h f u h y s su h, h ssu h y s s
et er t ere i a con en al a reement et een t e t o partie il on and Penderwh h h s s su g b w h w s, (W s
ndemnit ari e and i e to ed pon an a ent en e act it in t e con ine or2018). I y s s s b s w u g wh h s w h h f s
cope o i or er a t orit n ca e an a ent reac e t e a t orit e or e i elds f h s h u h y. I s g b h s h u h y, h sh s h
lia le An a ent ma not claim or dama e in tort en e or e act e ond t e cope ob . g y f g s wh h sh s b y h s f
t e a reed emplo ment n t e ot er and e pre act al a t orit come in en ah g y . O h h h , x ss u u h y s wh
principle e pre l tell t e a ent to act or carr o t a d t on i e al n implied act alx ss y s h g y u u y h s b h f. I u
a t orit an a ent act it t e idance o t e a t orit i en to im t e principleu h y, g s w h h gu f h u h y g v h by h .
Apparent a t orit i at time called o ten i le a t orit T i mainl ide a t ird partu h y s s s s b u h y. h s y gu s h y
o elie e t at a principle directi e o ld e ollo ed e en i t e a ent and t ewh b v s h ’s v sh u b f w v f h g h
principal did not a e an di c ion a o t it ere t e t ird part nder tand and noh v y s uss b u . H , h h y u s s k ws
t at t e a ent i a t ori ed to act on e al o t e principle arne A rea ona leh h g s u h z b h f f h , (C y 2018). s b
action done t e t ird part i protected la e peciall en it i no n t at aby h h y s by w s y wh s k w h
principal a t ori ed an a ent and all acti itie ere done accordin to t e re lation et nu h z g v s w g h gu s s . I
ome ca e a principle ma create an impre ion ere an a ent eem to a e eens s s, y ss wh by g s s h v b
a t ori ed proceedin it tran action t ird partie are deemed to a e actedu h z . By g w h s s, h s h v

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rea ona l A c t i cenario i called a enc e toppel A a re lt t e principle is b y. s su h, h s s s “ g y by s ”. s su , h s
e topped rom re tin t at e or e ranted a t orit to t e a ent illiam et als f fu g h h sh g u h y h g , (W s 2018).
A ca e in point is s
ama orporation imited Pro ed Tina and eneral n e tment td
R C
L V b
G I v s s L
lade
[1952] 2QB 147, S ere it a eld t at apparent a t orit or o ten i le a t orit iJ wh w s h h u h y s s b u h y s
a ind o e toppel t at i mainl compri ed o t ree actor ic are pre ence o ak f s h s y s f h f s wh h s f
repre entation reliance on t at repre entation and la tl and incidence ere ones , h s s y wh ’s
po ition i c an ed eca e o t e reliance t a al o eld in t e ca e os s h g b us f h . I w s s h h s f
attea
W u v
en ic
F w k t at principle are eld lia le or all act done a ent a lon a t e are it inh s h b f s by g s s g s h y w h
t e cope o t eir d tie and a t orith s f h u s u h y.
ia ilit i a cr cial element en it come to t e la o t e a enc An a ent can e eldL b y s u wh s h ws f h g y. g b h
lia le to a t ird part or a principle and a principle can e eld lia le to an a ent n t ib h y b h b g . I h s
partic lar cenario t e a ent i lia le to t e principle n t i re ard t e act al a t oritu s , h g s b h . I h s g , h u u h y
o ld e ollo ed en carr in o t an acti it An a ent ill e eld lia le en e orsh u b f w wh y g u v y. g w b h b wh h
e doe not in orm t e principle o an i e ic ma ari e in t e co r e o i d tsh s f h f y ssu s wh h y s h u s f h s u y,
od in n t e co r e o tran portin c c m er to t e mar et T e reat A tralian(G w 2018). I h u s f s g u u b s h k , h G us
ail a ompan did not t e deli er t e ood in time ntil ome o t em ot poiltR w y C y h y v h g s u s f h g s .
eca e o dela a a re lt o poor eat er condition A o ld a e in ormed t eB us f ys s su f w h s, G RC sh u h v f h
principle o er a o t it ence loo in or a po i le ol tion to t e pro lem o e er- R g b u h k g f ss b s u h b . H w v ,
lo e ere inc rred ence t e claim or dama e o er p ttin t e act intoss s w u h h f g s by R g . By u g h f s
per pecti e o er and t e rail a compan entered into a contract and a reed to ta e parts v , R g h w y y g k
in it A ra am T e ail a ompan a reed to carr o er c m er to t e, ( b h s 2017). h R w y C y g y R g ’s Cu u b s h
ictorian r it and e eta le Mar et actin in ood ait t e a ent decided to ell t emV F u V g b k . By g g f h, h g s h
ence t e lo e t at ere inc rred ail re o t e rail compan to comm nicate mean t ath h ss s h w u . F u f h y u s h

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o er o ld e a arded dama e a a in t e ca e oR g sh u b w g s s w s h s f prin er reat e tern ail aS g v G W s R w y
ompanC y [ 1921] 1 KB 257
PA T T o implied a t orit can ar a l e tend t e act al a t orit pro ided iR WO: H w u h y gu b y x h u u h y v s
a enc lag y w
mplied a t orit i de ined a a ri diction t at an a ent a o t at e or e can per ormI u h y s f s ju s h g h s s h h sh f
d tie and act t at are nece ar o t at t e p rpo e o i emplo ment contract in t eu s s h ss y s h h u s f h s y h
or ani ation i accompli ed n principle implied a t orit ena le an a ent to per orm allg z s sh . I , u h y b s g f
ta t at ind le all on e al o t e principle T oma and osks h b g y b h f f h , ( h s L w 2017).
To tart it implied a t orit i not ritten or e pre T i i a orm o a t orit t at ans w h, u h y s w x ss. h s s f f u h y h
a ent a eca e mo t o t e detail at time mi o t in t e contract A c certaing h s b us s f h s s ss u h . s su h,
detail are deemed to e part o t e a ent a t orit a e or e per orm t e d tie ns b f h g ’s u h y s h sh f s h u s. I
mo t ca e a ent are appointed o t at t e can act on e al o a compan o las s s, g s s h h y b h f f y, (D ug s
ile carr in o t i d t an a ent ma decide to a e telep one con er ation2017). Wh y g u h s u y, g y h v h v s s
and ma e appointment it client A c e i repre entin t e compan in entiretk s w h s. s su h, h s s g h y y. By
completin a ine tran action e i deemed to a e or ed accordin to t eg bus ss s , h s h v w k g h
re lation o t e compan er and Minne algu s f h y, (Dwy g 2018).
n A tralia it i elie ed t at mana er a e implied a t orit to carr o t d tie t atI us , s b v h g s h v u h y y u u s h
mana er are no n to participate in rne it i t i notion t at ma e t ird partieg s k w , (By 2018). s h s h k s h s
act no in t at mana er a e een i en t e de ired po er to repre ent t e client ork w g h g s h v b g v h s w s h
enter into di erent contract a lon a t e are or in in accordance to t e r le andff s s g s h y w k g h u s
re lation t at a e een et in t e compangu s h h v b s h y.

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T ere are met od in ic implied a t orit can e een in o r dail li e T e ir th h s wh h u h y b s u y v s. h f s
e ample i t e e o ni orm n mo t ca e emplo ee or a ent are dre ed in ni ormx s h us f u f . I s s s, y s g s ss u f s
ic repre ent a compan en t e are interactin it t e eneral p lic Pear onwh h s y wh h y g w h h g ub , ( s ,
n man ca e an indi id al earin a ni orm t at a a lo o i deemed to e ll2017). I y s s, v u w g u f h h s g s b fu y
or in nder a t orit rom i or er emplo er A c t e per on a in t e companw k g u u h y f h s h y . s su h, h s h v g h y
lo o i aid to e carr in an mplied A t orit o ontractg s s b y g I u h y f C .
ia ilit in mplied a t orit e i t en an a ent or on e al o a compan t eL b y I u h y x s s. Wh g w ks b h f f y, h
compan ecome lia le or an action done an a ent at roti n omey b s b f y s by g , (F u , 2017). I s
in tance emplo ee ma ma e a deci ion ic ill a e a e impact on t e compan ins s, y s y k s wh h w h v hug h y
orm o dama e allo in a di a led indi id al into a i li t t o it i a iolation andf f g s. By w g s b v u sk f , h ugh s v ,
t e indi id al et an in r a lia ilit i ence created t e emplo ee and a a re lt t eh v u g s ju y, b y s h by h y s su , h
compan ecome lia le or all dama e n t e ot er and t e compan ma tate t aty b s b f g s. O h h h , h y y s h
t e emplo ee acted e ond t e cope o i d t and a c t e emplo ee ecome lia leh y b y h s f h s u y s su h, h y b s b
or i r er actionf h s h s.
n ome in tance an a ent ma a e t e a it o a in i a t orit t ma in t eI s s s, g y h v h h b f bus g h s u h y hus k g h
compan ace lo e nder tandin t at e or e a implied a t orit one ma decidey f s s. By u s g h h sh h s u h y, y
to i e di co nt to i riend amil mem er or relati e T i oe a ar a accepting v s u s h s f s, f y b s v s. h s g s s f s g
ret rn it o t ad erin to compan ret rn policie n c a cenario t ere are certainu s w h u h g y u s. I su h s , h
action t at can e ta en a ain t t e emplo ee or a ent or in tance em plo ee a e tos h b k g s h y g . F s , 0 y s h v
nder tand t at t ere are re lation t at a e to e ad ered to A c mi e ou s h h gu s h h v b h . s su h, sus f
implied a t orit ill e red ced n mo t ca e it i e ential to indicate t at policie andu h y w b u . I s s s, s ss h s
price t at a e een et o ld not e iolated n ca e t ere are emplo ee o mi es h h v b s sh u b v . I s h y s wh sus

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implied a t orit t e can e p ni ed o t at t re act are deterred Al o emplo eeu h y, h y b u sh s h fu u s . s , y s
can e allocated ne po ition a ter determinin t at t e a ed t eir a t oritb w s s f g h h y bus h u h y.
n partner ip implied a t orit e i t and a a re lt partner ma e deci ion on e alI sh s, u h y x s s s su , s k s s b h f
o t e partner ip Partner al o eel t at t e a e a tron a t orit and t e d t to ma ef h sh . s s f h h y h v s g u h y h u y k
deci ion t at a or t e partner ip e pite t e pre ence o implied a t orit it i e entials s h f v h sh . D s h s f u h y, s ss
to a e e pre a t orit in it ation c a p rc a in o a et di p te re ol tion andh v x ss u h y s u s su h s u h s g f ss s, s u s u
ne ent re t at t e partner deem it t i t e ential to al a et ideline orw v u s h h s f . I s hus ss w ys s gu s f
partner and a ent o t at la it or di p te are a oided in ine a in a oods g s s h wsu s s u s v bus ss. By h v g g
nder tandin o at t e are ppo ed to do a ent o ld e at t e ore ront ou s g f wh h y su s , g s sh u b h f f f
di pla in a ood ima e or t e compans y g g g f h y.

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e erenceR f s
oinar i arnett T e e M and indenma er T e contri tion oW sk , J.C., G , S. ., L gg , S. . L y , D.B., 2017. h bu f
polic la mana ement re earc and ad ocac ailin to t e recent e tinction o t reey, w, g , s h, v y f gs h x s f h
A tralian erte rate pecieus v b s s.
on er ation iolo
C s v B gy,
31 pp(1), .13-23.
c ter a A ode ald A Martin T il on A att M Po in amS hus , R., L w, E. ., R w , .D., , .G., W s , K. ., W s, ., ss gh ,
P and Arce e P Ta i tin and incenti e or iodi er it con er ation on pri ateH. . s , ., 2018. x sh f g v s f b v s y s v v
lands.
on er ation etter
C s v L s,
11(2).
o ter T e at r t ioce e eci ion in A tralia and it mplication or t e i ilF s , N., 2017. h B hu s D s D s us s I s f h C v
ia ilit o rc eL b y f Chu h s.
ccle ia tical a o rnal
E s s L w J u ,
19 pp(1), .14-34.
ri t April oldin re lator to acco nt in e o t ale poll tion la PartW gh , S., 2017, . H g gu s u N w S u h W s u w:
t e limit o dicial re ie and ci il en orcement n2- h s f ju v w v f . I
A A or m
I L F u o p A tralian(N . 87, . 46). us
n tit te o Admini trati e aI s u f s v L w.
te art P and ilin A ompen ation or r i or o n tit tional ild e alS w , .E. S k, ., 2017. C s f su v v s f I s u Ch S xu
A e in A tralia Tortio ri t and c allen e or re ormbus us : us gh s h g s f f .
ildren and t e a in
Ch
h L w
A tralia
us .

rnameSu 10
il on and Pender Tollin ell and pa tree on perpetrator lia ilit inW s , J. , K., 2018. g b s u s s: N - b y
emplo ment lay w.
t o icial P lication o t e a ociet o t e A tralian apital
E h s: Off ub f h L w S y f h us C
Territory p, (247), .32.
arne A omment on o t e mplied reedom o Political omm nicationC y, G., 2018. C H w h I F f C u
e trict on tat tor ec ti e Po erR s s N -S u y Ex u v w .
A tl e
UW us . L. R v.,
43 p, .255.
illiam A M ta o adio Po er Marc en T Mc ae and oc ieldW s, ., ush q, S., K u , L., w , B., uss , ., R , D. C kf , G.,
An in e ti ation o arm cale adaptation option or cotton prod ction in t e ace o2018. v s g f f -s s f u h f f
t re climate c an e and ater allocation policie in o t ern een landfu u h g w s s u h Qu s ,
A traliaus .
A ric lt ral ater Mana ement
g u u W
g ,
196 pp, .124-132.
od in Pro in orporation Are A ent Pro lem and ol tionG w , D., 2018. v g C s g s: b s S u s.
A T A A
US R LI N
A MP T T A
M A
JOURN L OF CO E I ION ND CONSU ER L W,
25 pp(4), .270-278.
A ra am e tern A tralia eterminin t e proper approac to et er ab h s, Z., 2017. W s us : D g h h wh h
contractor a a ri t to call on an arantee nder a con tr ction contracth s gh b k gu s u s u .
A tralian
us
e o rce and ner a o rnal
R s u s E gy L w J u ,
36 p(2), .15.
T oma rmei ter and o e o mplied Tr t in t ical ac inh s, G., Bu s , O.K. L w, G., 2017. Issu s f I us E h H k g.
nI
Proceedin o T e t A trala ian on erence on n ormation tem ecem er
gs f h 28 h us s C f
I f
Sys s, D b pp( .
4-6).
o la M Anti it in nction in A traliaD ug s, ., 2017. -su ju s us .
Mel e
b. UL R v.,
41 p, .66.
er P and Minne al M aptain erill rror Mappin t e pper tric landDwy , .D. g , ., 2018. C Ev ’s E : g h U S k
i er in Pap a and e ineaR v u N w Gu , 1885–1979.
T e o rnal o Paci ic i tor
h J u f f H s y pp, .1-20.
rne ntellect al propert in A tralia oo e ieBy , S., 2018. I u y us [B k R v w].
t o icial P lication
E h s: Off ub
o t e a ociet o t e A tralian apital Territor
f h L w S y f h us C
y p, (248), .58.

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Pear on on mer ale la in A tralia ns , G., 2017. C su s s w us . I
omparati e on mer ale a
C v C su S s L w pp( .
o tled e23-38). R u g .
at roti e importin t e concept o a t ori ation o cop ri t in rin ement toF u , B., 2017. R - g h f ‘ u h s ’ f y gh f g
i eria rom t e and A traliaN g f h UK us .
nternational e ie o a omp ter
I
R v w f L w, C u s &
Tec nolo
h gy,
31 pp(1), .4-25.