Legal Rights of AFS Grocery Wholesalers Co Pty Ltd and Bruno in Contracts
Added on 2023-06-04
12 Pages3228 Words353 Views
|
|
|
Business LAW
BUSINESS LAW 1
Answer 1
Part 1
Issue
The issue in the given case study is to identify and examine the existence of any
legal rights of the entity AFS Grocery Wholesalers Co. Pty. Ltd, in order to claim the
payment of $45000 from the John’s Supermarket. The payment is for delivery of the
goods to John’s Supermarket that was ordered by Linda, the manager of the said
supermarket.
Rule
The given case study is based on the law governing the agency relationship. An
agency relationship is referred to as the relationship in which one party acts on the
behalf of the other and with the authority of that another party (Allen and Kraakman,
2016). An agency is a fiduciary relationship, where the agent is subject to the
principal’s control and must act according to the instructions given by him or her. The
most significant element of an agency is the consent of the both the parties, which is
essential and agency cannot be created without the same as held in the case
Carnac Grain Co Inc v HMF Faure & Fairclough Ltd & Bunge Corp [1967] 2 All ER
35. The real test of an agency is the nature of the underlying relationship.
In addition, some of the various aspects of an agency are the nature, mode of
creation and the terms and conditions of an agent-principal relationship. There are a
number of ways in which an agency relationship can be created. These are firstly by
means of an express contract, i.e. under seal by means of written or verbal contract.
Secondly, it can be created by means of an implied condition, such as through the
existence of any condition or situation of the parties concerned and by means of
ratification thereon. Some of the widely known principal agent relationships are that
Answer 1
Part 1
Issue
The issue in the given case study is to identify and examine the existence of any
legal rights of the entity AFS Grocery Wholesalers Co. Pty. Ltd, in order to claim the
payment of $45000 from the John’s Supermarket. The payment is for delivery of the
goods to John’s Supermarket that was ordered by Linda, the manager of the said
supermarket.
Rule
The given case study is based on the law governing the agency relationship. An
agency relationship is referred to as the relationship in which one party acts on the
behalf of the other and with the authority of that another party (Allen and Kraakman,
2016). An agency is a fiduciary relationship, where the agent is subject to the
principal’s control and must act according to the instructions given by him or her. The
most significant element of an agency is the consent of the both the parties, which is
essential and agency cannot be created without the same as held in the case
Carnac Grain Co Inc v HMF Faure & Fairclough Ltd & Bunge Corp [1967] 2 All ER
35. The real test of an agency is the nature of the underlying relationship.
In addition, some of the various aspects of an agency are the nature, mode of
creation and the terms and conditions of an agent-principal relationship. There are a
number of ways in which an agency relationship can be created. These are firstly by
means of an express contract, i.e. under seal by means of written or verbal contract.
Secondly, it can be created by means of an implied condition, such as through the
existence of any condition or situation of the parties concerned and by means of
ratification thereon. Some of the widely known principal agent relationships are that
BUSINESS LAW 2
of the employer and employee, financial advisers and the persons hiring them, and
more.
Some of the main duties of an agent are to follow the instructions of the principal, to
act in good faith and in person, to exercise due care and diligence, and to serve to
the best of the skills to the principal.
In addition to the creation and the duties, there are various aspects of the authority
as well. There exist different types of authorities, which have been described as
follows.
Actual Authority: An actual authority can be further of two types, namely the
express actual authority and the implied actual authority. An express actual
authority refers to the one that is expressly prescribed as a part of the terms
and conditions of the contract (Lindgren, 2011). An implied authority refers to
what is reasonably necessary to carry out the performance of the duties.
Apparent or ostensible authority: This kind of authority arises when the
principal’s acts or the words lead the third parties to believe that an agent has
been appointed to act on the principal’s behalf. Thus, a principal in this case is
generally estopped from denying the agent’s authority (Lindgren, 2011).
Application
On application of the rules as stated above, the following points are noteworthy.
Firstly, Linda has been hired as the manager by the owner of the John’s
Supermarket, Mr John Miley. In spite of being the owner of the supermarket, John
does not have much of role to be played in the business activities. His role is
confined to frequent visits to the store, discussion of the purchase of the replacement
of the employer and employee, financial advisers and the persons hiring them, and
more.
Some of the main duties of an agent are to follow the instructions of the principal, to
act in good faith and in person, to exercise due care and diligence, and to serve to
the best of the skills to the principal.
In addition to the creation and the duties, there are various aspects of the authority
as well. There exist different types of authorities, which have been described as
follows.
Actual Authority: An actual authority can be further of two types, namely the
express actual authority and the implied actual authority. An express actual
authority refers to the one that is expressly prescribed as a part of the terms
and conditions of the contract (Lindgren, 2011). An implied authority refers to
what is reasonably necessary to carry out the performance of the duties.
Apparent or ostensible authority: This kind of authority arises when the
principal’s acts or the words lead the third parties to believe that an agent has
been appointed to act on the principal’s behalf. Thus, a principal in this case is
generally estopped from denying the agent’s authority (Lindgren, 2011).
Application
On application of the rules as stated above, the following points are noteworthy.
Firstly, Linda has been hired as the manager by the owner of the John’s
Supermarket, Mr John Miley. In spite of being the owner of the supermarket, John
does not have much of role to be played in the business activities. His role is
confined to frequent visits to the store, discussion of the purchase of the replacement
BUSINESS LAW 3
stock and the signing of the necessary orders. However, the actual dispatch of the
order is made by Linda herself.
Secondly, as part of being in an agent principal relationship by the virtue of the
employer employee relationship, it was the duty of the manager Linda to exercise
actions that are necessary for the performance of the duties on behalf of the owner
John. In the absence of John, it was her duty to retain the customers and to serve
the entity to the best of her skills. As stated in the given case, owner is out of the
town and has not even left and contact number for the agent Linda to communicate
with him. But as she is worried of losing the customers, she enters into a contact with
AFS Grocery Wholesalers Co Pty Ltd, and accordingly places an order worth $
45000 in the best interest of the entity.
Thirdly, it can be stated that although no express authority was given to the manager
Linda to enter into the contract to purchase the goods from AFS Grocery
Wholesalers Co Pty Ltd and to sell the same, there existed an implied authority to do
the acts best suitable to the entity to retain the customers and thereby acting as a
part of the contact of her employment.
Lastly, it can be said that as she was the only person available in the super market in
the absence of the owner and to carry out the sales, the third party has reasons to
believe that she is having the enough authority to enter into the purchase contracts,
necessary for the furtherance of the sales contracts. Thus, the apparent or the
ostensible authority existed for the third party to regard her as an appropriate person
for the contract.
Conclusion
Thus, as per the discussions in the previous parts on the basis of the rules of an
agency relationship, it can be concluded that as Linda was the employee and
stock and the signing of the necessary orders. However, the actual dispatch of the
order is made by Linda herself.
Secondly, as part of being in an agent principal relationship by the virtue of the
employer employee relationship, it was the duty of the manager Linda to exercise
actions that are necessary for the performance of the duties on behalf of the owner
John. In the absence of John, it was her duty to retain the customers and to serve
the entity to the best of her skills. As stated in the given case, owner is out of the
town and has not even left and contact number for the agent Linda to communicate
with him. But as she is worried of losing the customers, she enters into a contact with
AFS Grocery Wholesalers Co Pty Ltd, and accordingly places an order worth $
45000 in the best interest of the entity.
Thirdly, it can be stated that although no express authority was given to the manager
Linda to enter into the contract to purchase the goods from AFS Grocery
Wholesalers Co Pty Ltd and to sell the same, there existed an implied authority to do
the acts best suitable to the entity to retain the customers and thereby acting as a
part of the contact of her employment.
Lastly, it can be said that as she was the only person available in the super market in
the absence of the owner and to carry out the sales, the third party has reasons to
believe that she is having the enough authority to enter into the purchase contracts,
necessary for the furtherance of the sales contracts. Thus, the apparent or the
ostensible authority existed for the third party to regard her as an appropriate person
for the contract.
Conclusion
Thus, as per the discussions in the previous parts on the basis of the rules of an
agency relationship, it can be concluded that as Linda was the employee and
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents