Agency Law and Contract Termination

This assignment presents a legal case study involving Franc, Angela, and a third party involved in delivering machines. The central issue revolves around the termination of the agency relationship between Franc and Angela, and how this affects the delivery obligations. Students are tasked with analyzing the legal principles of agency law, contract formation, and termination, particularly focusing on the impact of notice and potential remedies available to the parties involved.

Law Assignment 1
Law Assignment
Name
Institution

Law Assignment 2
Predominantly, Australian contracts are bound by English Common law,
Corporations Act (2001), Competition and Consumer Act(2010)and other
individual state statutes and regulation. Under Australian contract law, contracts
are legally binding promises usually made under agreement with the passing of a
consideration between the parties .In the event of breach of agreement, the party
aggrieved by the breach of contract has various options available. In this case,
Qantas has the option of suing for payment of the liquidated sum contained in the
contract (Clarke, 2010) Typically, liquidated sums are payable in the event of
breach of contract and is usually stipulated in the contract before it is signed
(Mcnair, 2016).
Law and Issues
Typically, contractual terms can be expressed in terms of conditions and
warranties. A condition implies any term or terms that stems to the root of the
contract whereas a warranty implies terms in the contract that aren’t so important
to the contract. In the event that there’s a breach of a condition in a contract, the
aggrieved party is entitled to repudiate the contract and claim damages therein.
However, in the case of a breach of the warranty of a contract, the aggrieved party
is entitled to claim damages as opposed to repudiating the contract.
Under English contract law which is applicable in Australia. As articulated in the
contract signed between Qantas and Airbus, the liquidated sum in the event of
breach of contract is legally available for Qantas Airlines to claim under
liquidated sums of money claim as stipulated in the contract. Similarly, in

Law Assignment 3
Poussard V Spiers, It was decided by the court that the inability of madam
Poussard to perform as an opera singer due to the fact that she got ill on the eve of
the performance was considered a breach of a condition thus entitling the
defendants to terminate the contract.
In the Moorcock case, it was held that there an implied undertaking of delivering
obligations under the contract. in this case, there was an undertaking to take the
Ship ,Moorcock out for mooring .However, due to low tides, the ship got
damaged thus it was held that the defendants were in breach of this implied
undertaking. Regarding exclusion of liability clauses, under Common law ,such
are unenforceable due to the need to protect aggrieved parties in a contract. As
illustrated in Olley v Marlborough Court, the hotel was not bound to pay for the
stolen coat in their hotel premises because there had been a disclaimer notice in
the hotel room.
Exclusion clauses are enforceable if signed with the contract and not
otherwise .As articulated in the contract signed between Qantas and Airbus, the
liquidated sum of money in the event of breach of contract is legally available for
Qantas Airlines to claim under liquidated sums of money claim as stipulated in
the contract. Additionally, Qantas Airlines Ltd can apply to the court for specific
performance and injunctions .Primarily, specific performance and injunctions are
equitable remedies for (Clarke, N .d).
Whereas a claim for damages and liquidated damages is Common law.
Mandatory injunction can be obtained to compel Airbus Corporation to reverse

Law Assignment 4
the effects of the breach of contract in this case the installation of the right
entertainment software (Allen and Overy, N. d).In Sky Petroleum Ltd V ViP
Petroleum Ltd, an injunction was granted to prevent the defendants from
terminating a contract which they had committed to buying petrol supplies from
the plaintiffs for a minimum period of ten years. Specific performance refers to
orders issued by the courts upon application by the aggrieved party to compel the
other party to fully execute his or her part of the contract.
As illustrated in Bettini vs Gye, it was held that the inability of an opera singer to
perform as contracted due to an illness was more of a breach of warranty than a
condition thus making it unnecessary for the defendants to terminate the contract
of service. However, the same does apply to the Qantas case as the inability to
install the recommended software entitles the Airline to damages as opposed to
termination of contract. In the case of breach of contractual terms, the party
aggrieved by the breach of contract has various options available. In this case,
Qantas Airlines has the option of suing for payment of the liquidated sum.
Typically, exclusion clauses are contractual clauses stipulated in a contract
denying or limiting liability on the part of the buyer. Most times, such clauses are
unenforceable but sometimes enforceable if properly construed in the contract and
upholds contract laws. Regarding exclusion of liability clauses, under Common
law, such are unenforceable due to the need to protect aggrieved parties in a
contract.

Law Assignment 5
Moreover, specific performance is issued by the courts under equity in instances
where the award for damages is considered inadequate. Courts make orders for
equitable remedies when it is considered just and equitable, to remedy the
inadequacy of the common law to adequately compensate the aggrieved party to
the contract. Also, Qantas Airlines Ltd can sue for damages for the material
breach of the contract terms (Clarke,2012).As stated in Haxley vs Baxendale
,where it was held that damages are awarded in the case of breach of contract.
Usually, damages are the commonest remedies for breach of contract.
Issues
Is Airbus Corporation in breach of conditions and warranty ?if so, what next? Are
Exclusion clauses enforceable?What remedies are available.
Application.
In the Qantas Airlines Case, the failure to install the 36 channels in the
configured entertainment system goes to the root of the contract thus the option of
repudiating the contract. According to the Unfair Contracts Act, which is under
Common Law, which is applied in Australia, Airbus cannot rely on the exclusion
of liability clause. This is because Exclusion or liability clauses are unenforceable
because it wasn’t signed by Qantas Airlines ltd.
Conclusion

Law Assignment 6
Airbus Corporation is in breach of Conditions of the contract and cannot rely on
the exclusion clause for liability. Qantas Airlines has the option to seek
mandatory injunction, damages and specific performance.
Question 2
Law
Essentially, principal agent relationship occurs when one person know as the
principal contracts another person, the agent to act on his r her behalf. Usually,
agent s actions within the scope of authority given by the principal bind the
principal. The principal is liable for all the actions done by the agent in the course
of ordinary business .Like any other legal relationship there are rights and duties
imposed on both the principal and the agent. Under fiduciary duties, Agents must
act in the sole interest of the principal and in good faith .In the case of any profits
made in the ordinary course of business, the agent has a duty to disclose to the
principal.
Typically, principals are liable for the acts of their agents directly and vicariously.
Usually ,the agent possesses expressed or implied authority to act on behalf of the
principal hence binding the principal in the event that the agents contracts within
the authority given to him(Rasmusen,2001).In Freeman & Lockyer vs Buckhurst
Park Properties, the company was bound to pay the defendants despites the fact
that only one director commissioned the work, without the quorum of four
directors .The existence of actual authority present in the one director was
sufficient to bind the company. Following the ruling in this case, Franc is liable for

Law Assignment 7
the acts of Bob due to the existence of actual authority and lack of notice to third
parties.
According to English Common law, a principal is liable for the acts of the
agent who despites being dismissed from work, third parties are unaware of it.
Further, notice of termination of an agent’s authority is vital for the dismissal or
termination of the agent s authority to third parties. In the event that a dismissed
agent acts without the authorization of the principal and the third party is unaware
of his lack of authority, makes the principal responsible for the acts of the
dismissed agent unless he had notified third parties of the termination of the
agency relationship between him or her and the agent (Powell, 1961).As stated in
the case of Re oriental Bank Corporation ex p Guillemin .
In this case, money was paid into the Mauritius Bank branch after winding
up proceedings against the company commenced but that was before the Branch
got wind of it. It was held that without the notice of revocation, bank official’s
authority was still in effect. However, the agent is personally liable for deceit to
the third parties he contracts with without the agents authority as illustrated in
Collen vs Wright. Following the ruling in this case, Franc is still considered the
principal to Bob due to the lack of notice of termination of the agency
relationship between him and Bob issued to third parties .Apparent authority of an
agent is presumed in the event that no notice of termination was issued.
Following the ruling in Bentley vs Craven case, it was decided that the
agent is responsible to pay profits gained in the conduct of business in the name

Law Assignment 8
of his agent. This puts Bob in contradiction of his fiduciary duties to Franc and
liable to return the profits made in the transaction with Angela. Fiduciary duties
include acting in good faith and in the interest of the principal. In this context,
Bob is an authorized agent of Franc thus making his actions and dealings binding
on Frank, the Principal .As illustrated Robb v Green, it is wrong for an agent to
maintain the client lists and record of his principal. The fact that Bob contracted
with Angela under the umbrella of Francs client makes him liable for damages.
Further ,there s the knowledge of the agency relationship between Frank and
Bob to third parties ,such as Angela, thus this makes Frank liable for the actions
of Bob to third parties. In addition, Bob is in breach of conflict of interest from as
illustrated by Christie v Harcourt. Moreover, the fact that Bob acted within the
ordinary course of business and within the authority previously given to him by
Francs, makes him liable for the acts of Bob.
Issues
Is Franc Liable to deliver the Machines to Angela? Is Bob In breach of his
fiduciary duties?
Application
In this Context, the fact that Bob made away with profits made from the
transaction with Angela while purporting to act for the Principal, Franc, makes
him liable to the principal in the sum paid. Noteworthy, Bob has broken his
fiduciary duty of acting in good faith and in the interest of his former boss, Franc.
Further, Bob s conflict of interest was illustrated when he contracted to supply

Law Assignment 9
washing machines to Angela despite having no authority to do so. Bob is in
breach of his fiduciary duty of acting in good faith in the sense that he received
payment for the transaction, made away with the profits with no intention of
delivering the goods to Angela.
There s clear evidence of Bob s breach of his fiduciary duties .Under English Tort
Law which is applicable in Australia, Franc can sue Bob to recover the payment
Angela to his business. made by A made by A The fact that Franc did not ensure
Bob was out of the office when he fired him, will act against him thus the need for
Franc to deliver the machines to Angela and recover the same from Bob. Bob s
conduct was in breach of all duties, dishonest thus made in bad faith, conflicted
with the interest of the principal in the sense that he defrauded both Franc and
Angela and made away with the profits thus making him liable for not disclosing
profits made in the ordinary course of business.
Conclusion
Evidently, Bob is in breach of his fiduciary duties as an agent to his
former boss, Franc thus liable for deceit, under Tort Law .Equally, Franc is liable
to deliver the machines to Angela due to the lack of notice of termination of
agency relationship between him and Franc to Angela.

Law Assignment 10
References
Allen and Overy. (N.d). Principles of English Contract Law. Advocates for
International Development .Retrieved from http://www.a4id.org/wp-
content/uploads/2016/10/A4ID-english-contract-law-at-a-glance.pdf
Clarke. J. (2012).Remedies. Australian Contract law. Retrieved from
http://www.australiancontractlaw.com/law/remedies.html
Clarke J.(2013).Equitable Remedies .Australian Contract law. Com. Retrieved
from https://www.austaliancontractlaw.com/law/remedies-equity.html.
Mcnair, D. (2016).Liquidated and Un liquidated Damages. PWC. Retrieved from
http://www.pwc.com.au/legal/assets/investing-in-infrastructure/iif-37-
liquidated-unliquidated-damages-feb16-3.pdf
Powell.(1961.).The Law of Agency. 2nd Edition.p.395
Shmidt, A.(N.d).Liability of Principal and Agent ;Termination of Agency. The
Legal Environment and Business Law: Executive MBA Edition (Vol .1.0)
Mechem, R. F. (1893).Cases on the Law of Agency .University of Michigan.
Retrieved from http://repository.law.umich.edu/books/28/
Upex, R and Bennet, G. Davies on Contract.9th Edition. Sweet & Maxwell.

Law Assignment 11
Rasmusen, E.(2001).Agency Law and Contract Formation. The Center for
Law ,Economics ,and Business. Retrieved from
http://www.law.harvard.edu/programs/olin_center/papers/pdf/323.pdf
Reed, A.P.(1994).Contract Law Casebook.6th Edition.HLT Publications.
Statutes
English Unfair Contract Terms Act (1977)
Case law
Bentley v Craven.[1853]
Bettini v Gye 1876QBD 183
Freeman 7 Lockyer v Buckhurst Park Properties.[1964]
Colleen v Wright [1857]7 E & B 301; affd 8 E 8B 647
Christie v Harcourt.[1973] NZLR 139
Robb v Green.[1895]
Haxley v Baxendale [1854] 9 Ex 341
Re Oriental Bank Corporation Ex Guillemin .15[1884]28 CH d 634
Ruxley Electronics & Construction Ltd v Forsyth, Ladding ford Enclosures Ltd
[1994] The Times 7Court of Appeal
Sky Petroleum Ltd v VIP Corporation Ltd.(1974) I WLR 576 HC

Law Assignment 12
Olley v Marlborough Court [1949] 1 KB 532