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Law of Agency in Relation to Contract

   

Added on  2021-06-16

10 Pages2281 Words458 Views
0CORPORATION AND BUSINESS LAWCORPORATION AND BUSINESS LAWName of the Student:Name of the University:Author Note

1CORPORATION AND BUSINESS LAWAnswer 1 Issue The law of agency has to be discussed for the purpose of finding out the position of Gabby,Terence and Sara in relation to contract in context. Rules The law of agency is applied by the courts in order to identity the position of the principal, agentand the third party in relation to any contract formed. The general rule as discussed in the case ofChan Yin Tee v. William Jacks and Co. (Malaya) Ltd [1964] MLJ 290 had signifies that whereA is the agent of B and gets into a contract with C who is the third party, the actual parties to thecontract would be B and C and not A and C. however there is a certain exception which isapplicable to this general rule. The exception had been provided via the English case of YinKwan v Eastern Insurance Co Ltd [1994] 2 AC 199. The exception is commonly known as adoctrine of election. This is a common law doctrine which is applied in situation of an“undisclosed principal”. This means that while entering into a contract with the third party anagent who had been provided authority by the principle did not disclose to the their party theexistence of the agency. Where the third party does not have knowledge or understanding inrelation to the existence of agency on the part of the person they have entered into a contractwith, they can choose either the agent or the principal as the party to the contract. Application of law Sara in this case has been shown several options in relation to a piece of jewelry which waswanted Gabby. Sara however has not informed Gaby that she is working or Terence. Gabby has

2CORPORATION AND BUSINESS LAWplaced an order to Sara in relation to the price of $1000. Terence is thinking that the contract hasbeen formed between her and Gaby. However while entering into a contract with Gabby, Sarawho had been provided authority by Terence did not disclose to Gabby the existence of theagency. Therefore in situation where Gabby does not have knowledge or understanding inrelation to the existence of agency on the part of Sara she have entered into a contract with, shecan choose either Terence or Gabby as the party to the contract. Thus in the given situation theapplication of the doctrine of election would provide for Gabby to chose either Terence or Sarain relation to the contract for purchasing the broach. The doctrine would be applicable as theprincipal has not been disclosed. Conclusion Gaby can choose either Terence or Sara in relation to the contract for purchasing the broach.Part 2Issue The law of agency is again at issue to determine the rights which Mary has towards enforcing thecontract entered upon with Peter on Terence. Rule The law of agency is applied by the courts in order to identity the position of the principal, agentand the third party in relation to any contract formed. The general rule as discussed in the case ofHutchinson v Brayhead Ltd [1967] 1 QB 549 had signifies that where an the agent gets into acontract with a the third party in the course of authority, the actual parties to the contract would

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