Contract Law Scenarios Analysis
Added on 2020-03-07
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Running Head: Law 1Law
Law2Answer 1Question:In the present case, Vera is the famous painter and she paints scenes of the landscapes of high artistic merit. Recently, she made one painting and named her painting Dawn. She considered thedawn as her best painting in last 10 years. She appoint agent for the purpose of selling her painting, and she wants to sell that painting for $40000. She further instructed him not to sell the painting for less than $32000, without her written approval. Part A- Siddo sold the painting for $20,000 to Queenie?Part B- Painting was purchased by Siddo from Vera for himself for $32,000, and after sometime he sold the painting for $38000 to his friend Elly?Part C- Painting was sold by Siddo to Isobel for $32,000, and Isobel was completely in love withthe painting of Vera. She was thinking that she gets the painting in discount, and because of over excitement she gave extra $3000 to Siddo for himself. Answer Plan:Part A:Contract of agencyDuties of agentLiability of principalRemedies available to third partyPart B:Liabilities of the Principal:Remedies available to principalLiability of agent towards the third partyFiduciary dutyPart C:Secret Commission
Law3Answer:Part AContract of agency involves three parties that are principal, agent, and third party. As per this contract authority is passed by principal to the agent for the purpose of giving effect to the legal relations between principle and third parties. Any person who possessed contractual capacity canappoint the agent. It must be noted that, agent does not have similar powers like principal. Relationship of agent and principal can be created by three ways that are by express/actual authority, authority implied by conduct, by principle of estoppel, and by operation of law. There are three types of agent that are special or limited agents- (these agents are appointed for the purpose of entering into particular contract), general agents (these types of agents are authorized to make contracts related to particular task), and universal agents (these types of agents possess similar power possessed by their principles). Agents have various authorities to act on behalf of the principle and these authorities are stated below:Actual/Express authority- principle passes the authority to the agent but with specific terms, such as don’t sell this flat below $7000. Implied and actual authority- this authority occurs when any act was performed by agent for the purpose of fulfilling the actual/express authority granted to them.Duty of agent:Agents are under obligation to perform various duties which they owned towards principal as well as towards the third party also, and some of these duties are stated below:
Law4It is the duty of agent to follow the terms related to his/her authority and instructions given by principal. It is the duty of agent to perform their operations with due skill and diligence. This can beunderstood through case law Mitor Investments Pty Ltd v General Accident Fire and Life Assurance Corp Ltd and Australian Insurance Brokers (WA) Pty Ltd [1984] WAR 365. In this case, owner of the hotel employed Australian Insurance Brokers for the purpose of getting the hotel insured against the damage caused by storm, tempest and flood. Broker appointed by owner get the insurance with General Accident Fire and Life Assurance Corp Ltd against the flood, but they did not include the damage caused by the sea. Later, damage caused to hotel by cyclone, and because hotel was not secured against damage caused by sea claim made by owner was failed. Owner file claim against the broker that broker fails to follow the instructions of agent. In this case, Court held that brokers are liable towards the owner because they failed to follow the instructions made by owner, and they are also liable under negligence. Liabilities of Principle:Following are the liabilities of principal on behalf of the agent:It is the duty of principal to perform the promise made by agent to the third party while acting as an agent of the principal. Principal is liable towards the third party in case agent does not act within the scope of their authority, but agent must act in the ordinary course of agency. Remedies Available to principal:
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