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CSU Busines Law 504 Modules

   

Added on  2021-05-31

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Running head: BUSINESS LAW0Business Law

BUSINESS LAW1Question 1.1IssueWhether a contract exists between Terence and Gabby even through Sara failed to tellGabby that she works for Terence?LawAn agency is referred to a business or organisation which offers a specific service onbehalf of another person, business or group (CSU LAW504 Modules, 2018, Topic 12). TheAgency Law provides that an agent has the authority to establish a legal relationship betweenthe principal and a third party. While entering into a contract, an agent is required to disclosehis agency by stating the name of his/her principal. In Keighley, Maxted and Co v Durant(1901) AC 240 case, an agent entered into a contract without disclosing his agency topurchase wheat in his own name. The court held that the principal could not be held liable forthe act of an agent who did not profess his/her agency while entering into a legal contract(OUP, 2016). However, the principal will be held liable for the action of an agent if theidentity of the principal disclosed at the time of the transaction. As per the judgement whichwas given in Siu Yin Kwan v Eastern Insurance Co Ltd (1994) 2 AC 199 case a corporationwhich purchases insurance for its employees is considered as an agent and after disclose ofthe principal, the insurance company had to pay the amount of insurance claim to therepresentatives of the principal.ApplicationWhile dealing with Gabby, Sara failed to reveal her agency which makes her liablefor the contract. However, Terence revealed his agency by calling Gabby. As per theprovision of undisclosed principal, Terence has entered into a contract with Gabby becausehe is liable for the actions of his employees as provided in the case of Siu Yin Kwan vEastern Insurance Co Ltd. ConclusionIn conclusion, Terence entered into a contract with Gabby based on the provision ofundisclosed principal and Gabby has a right to ask for performance from either principal orthe agent.

BUSINESS LAW2

BUSINESS LAW3Question 1.2IssueWhether a contract exists between Terence and Mary even though Terencespecifically told Peter to buy silver rather than gold?LawIn the agency law, the principal provided authority to an agent to act on his behalf andenter into legally binding contracts with third parties. The agency law categorised authority ofan agent into two parts: actual and ostensible or apparent authority. The actual authority iscategorised into two parts: express and implied authority. The express authority is defined asthe authority which was given by a principal to his/her agent in written or oral form (CSULAW504 Modules, 2018, Topic 12). On the other hand, the implied authority is the ability ofan agent to construct a legal contract with third party on behalf of the principal without anexpress agreement. It refers to an agent with the jurisdiction to perform an act which isreasonably necessary for completing the purpose of the agency. The court analyses facts of each case to understand the customs and usage of abusiness or trade in order to determine an implied authority. A similar judgement was givenin Watteau v Fenwick (1893) 1 QB 346 case. In this case, Watteau (the claimant) sold cigarsto the Humble (pub manager). He later found out that Fenwick is the real owner of the puband he filed a claim against him for the unpaid money. The court held that although Humblewould have held liable for the unpaid amount by the agency of Fenwick has been disclosed,therefore, he will be liable to pay the unpaid amount of his agent because he acted on hisbehalf.ApplicationIn case of Terence and Mary, a contract exists between the parties based on theprovision of implied authority. Terence had given implied authority to Peter when heemployed him as supplier purchaser. Mary also knew that Peter is authorised to act on behalfof Terence. Based on implied authority, a contract has constructed between Terence andMary and Terence is liable to comply with the terms of the contract. A similar judgement wasgiven in

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