Legal Principles of Agency: Can Steve Sue Bianca for the Expenses Incurred for Alpaca's Surgery?

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Contents
Solution.......................................................................................................................................................2
Issue........................................................................................................................................................2
Applicable Law.......................................................................................................................................2
Application of Law..................................................................................................................................4
Conclusion...............................................................................................................................................6
Bibliography................................................................................................................................................7

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Solution
Issue
Can Steve sue Bianca for the expenses incurred by him for the surgery of Alpaca? Can Bianca
avoid the liability by establishing that Steve is not her agent?
Applicable Law
The raised issue is resolved by analyzing the legal principles of agency.
When one person is authorized by another person to undertake acts and omissions on his behalf
then the relationship is called the relation of agency. The person who is delegating his power to
his inferior is called the Principal and upon whom the power is delegated is called the agent of
the Principal.
When the agency is created amid the principal and the agent then an agent has the power to carry
out functions that are delegated upon him by the principal. An agent can enter into a contract
with the third parties on behalf of the principal. The third parties will consider the agent as the
represented of the principal and the acts and omissions that are carried out by the agent with his
delegated powers are binding upon the principal. No principal can disapprove the actions
undertaken by the agent with in his authority. In (International Harvester Co of Australia Pty Ltd
vCarrigan’sHazeldene Pastoral Co1, it was rightly held that the agency is a situation where in an
authority is created upon one person (agent) who has the ability to affect the relationship amid
other persons, that is, the principal and the third parties.2
The main elements to establish amid the parties are:3
i. That the agent is authorized to represent the Principal in front of the third
parties/outsiders;
ii. This agency is created by the presence of agreement. The agreement can be either in
the form of words of mouth, in written form deed) or by expressly creating agency
amid the parties. In (Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd 19644,
the court held that an agency can be established either actually by the principal or
apparently by representing the person as his agent in front of the outsiders;
iii. The acts of the agent are owned and controlled by the principal himself.
Any agency that is created amid the parties, regardless of the manner in which the same is
formulated, every such agency is comprised on the above stated elements.
1 International Harvester Co of Australia Pty Ltd vCarrigan’sHazeldene Pastoral Co . 100 CLR 644 (1958).
2 Pont, 2008. Law of Agency7. Australia: LexisNexis Butterworths.
3 Ibid.
4 Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd 1964.

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However, there is no one form of agency that is established amid the parties. an agency can be
categorized in four major forms.
The first is an agency by Actual or express authority. When the principal delegates his authority
on the shoulders of the agent expressly, that is in writing or by words of mouth then it is an
actual agency that is established amid the principal and the agent. In Freeman and Lockyer v
Buckhurst Park Properties (Mangal) Ltd5, Lord Diplock has rightly explained the actual or express
form of agency.6
The seconds is the agency created by implied authority. In the leading case of (Hely-Hutchinson
vBrayhead7, it is submitted by Lord Denning that implied author is an authority that is assumed by
the agent as his usual course of business. This authority is part of the express authority and is not
specifically given to the agent.8
The third is the agency created by estoppel. When the agency is created by the principal by
holding out the person as his agent in front of outsiders and is rightly established in the leading
case of Lysaght Bros & Co Ltd v Falk9 and International Harvester case10.11
The forth is the agency created in necessity. it is a situation when the agency is created amid the
agent and the principal because of the situation of emergency or necessity. It is a deemed agency
that is established amid the parties because of the need of the situation and time and the
circumstances in which the agent has found himself to act on behalf of the principal and is
rightly held in Bank of New South Wales vOwston12. It is a satiation wherein the agent has not under
circumstances to obtain consent from the principal and is acting in good faith and in the interest
of the principal and is rightly held in China Pacific SA v Food Corp of India13. Thus, to prove agency
in necessity, the basic requirements includes:14
a. That the agent is entrusted with the property of the principal.
b. That the property is at risk and is necessary that the agent must have assumed
property.
5 Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd . 2 QB 480 (1964).
6 Thampapillai, Vivi, Claudio and Matthew. 2016. Australian Commercial Law. Australia: Cambridge University Press.
7 Hely-Hutchinson vBrayhead. (1968).
8 Thampapillai, Vivi, Claudio and Matthew, n6.
9 Lysaght Bros & Co Ltd v Falk . 2 CLR 421 (1905).
10 International Harvester case. (1958).
11 Thampapillai, Vivi, Claudio and Matthew, n6.
12 Bank of New South Wales vOwston . LR 4 App Cas 270 (1878).
13 China Pacific SA v Food Corp of India . AC 939 (1982).
14 Miles. 2015. Thomas and Reuters.
https://legal.thomsonreuters.com.au/product/AU/files/720506676/chapter_summary_21e___ch_5.pdf (accessed April 14, 2018).