Commercial Law Assignment: Factors Act, Agency, and Case Studies

This commercial law assignment provides a comprehensive overview of key concepts, including the Factors Act 1889, different types of agents (special, general, brokers), and agency law principles. It delves into the Civil Procedural Rules, adversarial systems, and commercial claims. The assignment includes an analysis of several case studies, such as Heathcote Ball v Barry, Yonge v. Toynbee, and Choudry v Prabhakar, highlighting the application of legal principles. Furthermore, it presents a scenario involving Safety Gear GmbH and its agent Ali, examining the scope of agency, contractual obligations, and liabilities. The assignment also addresses the consequences of an agent exceeding their authority and the importance of adhering to contractual terms. It provides a clear understanding of agency law, the responsibilities of both principals and agents, and the legal implications of various business transactions.

COMMERCIAL LAW

Contents
PART A...........................................................................................................................................1
PART B............................................................................................................................................2
PART C............................................................................................................................................3
PART D...........................................................................................................................................4
PART E............................................................................................................................................5
REFERENCES................................................................................................................................8

PART A
1.
According to the Factors act 1889, the word factor has been considered as mercantile
agent who work on behalf of another person called as principal.
2.
Special agent is the authority who is confined to a particular instance. He may not able to
bind his principal beyond the authorized limit.
3.
Broker has been considered as individual person who act as mediator among buyer and
seller. He is responsible to manage transaction among them.
4.
Business law consists concept of Del Credere Agency. It is presented as relationship
among principal and agent. In case buyer is failed to pay his debts after the transaction is
completed.
5.
As per the provision of business law General agent is the person who has been authorized
to transact every business for his principal.
PART B
1.
Civil Procedural Rules consist concept of over-riding objective related to courts. It
includes ensuring, so far as is practicable, that current parties are on an equal footing and needs
to save expenses 1. It involved amount of money and analyses financial position of each and
every party.
2.
Adversarial system is the legal system which is mostly used by common law countries in
which two advocates are responsible to represent case of parties and try to resolve them as them.
Usually, final decision provided by judge who having capability to resolve the case. It can lead to
1 Mäntysaari P. Organising the firm: theories of commercial law, corporate governance
and corporate law. Springer Science & Business Media; 2011 Sep 18.
1

injustice. Most of the time judge are not able to resolve matter of parties. Also it having issues
with accessibility.
3.
Commercial claim has been consisting under commercial law. It is representing as legal
obligation which is occurred while conducting and maintain business. Furthermore, business
activities related to selling and distribution of products and services and used in companies while
performing function.
4.
Usages analysis consists identifying several users related to deployment who are
responsible to determining the usages patterns for those users. It is useful to collect information
which are related to them as per the requirement of them. Some requirement is as aligned below
It has been used to determine the expected load related to deployment. It is useful for model
typical users. It can create asset of system requirement.
5.
Business law consists concept of agency law which is formed through various types such
as: Agency by expression- Two parties form legal contract with each other through oral and
power of attorney. In which two parties express feeling or words through expression and comes
in legal contract with each other. Agency by operation of law- At the time of contract operation
can be done by virtue of law. This type of agency has been considered as enforceable by law.
Agency by rectification- The word rectification represent various adoption of business activities.
Two parties called as principal and agent form legal agreement known as agency and responsible
to perform function as imposed on them 2.
PART C
1.
Answer is (a)- As per the rule of law Specific and general actual authority is able to
granting using a power of attorney document. People are bound to follow rules and regulation
which are imposed on them.
2.
2 Goode R, Kronke H, McKendrick E, Wool J. Transnational commercial law:
international instruments and commentary. OUP Oxford; 2012 Mar 29.
2

Answer is (d)- On the basis of provision of law, alteration of position is not required for
the purpose of appearance of authority. It is the legal term which is mentioned under commercial
law and maintain performance of parties.
3.
Answer is (a)- As per the rule of agency law, there are various consequences occur in
case agent incorrectly delegates the authority 3. Such as all contract among parties are terminated
automatically, principal can avoid paying the amount to sub-agents and the action taken by him
not able to bind principal.
4.
Answer is (c)- In the case, Heathcote Ball v Barry, 2000 EWCA Civ 235, person who
considered as claimant in this case needs to submitted highest bids at an auction which is stated
to be without reserve. Present items are called as two Alan Smart engines which are available at
worth 14,000 pound. In this case, the claimant submitted the bid of 200 each pound. But
auctioneer not want to sell the same at that price. After this claimant lodge complaint against him
in order to receive amount of damages which are caused to them. So that, defendant is
responsible to pay amount as specified by legal authorities.
5.
Answer is (a)- Case: Yonge v. Toynbee, 1910, in this case plaintiff needs to take action
related to defamation in courts against the another party called as defendant. In which plaintiff
has been declared as insane.
PART D
Case: Choudry v Prabhakar, 1989 1 WLR 29, In this case plaintiff is the women who is 26
years’ old. She was completed her driving test and seeking for second hand car just to continue
her practice of running car. She asked for first defendant who is considered as close friend. She
told her to find second hand for her and he ready to do so and ready to found car foe her for no
price. In this case, defendant transfer car with crumpled bonnet and not fit for the purpose of her.
At the time of purchasing the car both buyer and seller comes into contractual relationship with
each other and try to fulfil their legal obligation which is imposed on them as per the provision of
law. in which defendant held duty of care for plaintiff which is compulsory to follow by them.
3 Ali SF, Ginsburg T. International commercial arbitration in Asia.
3

In this case an agent even a volunteer has been owned duty of care which is appropriate
for those circumstances. The measurement should be considered as objective not in the form of
subjective. The issues crated in this case is that advice provided by defendant provide gratuitous
advice to plaintiff which is considered wrongful act under the provision of law. Due to this
reason, plaintiff lodge complaints against defendant in order to receive amount of compensation
for wrongful act. The final decision declared by firm has been considered as allowed. Judges
should accept his claim which is filed by plaintiff in against of second defendant. The reason
behind this is that claimant should believe that second defendant was knowledgeable about
various cars and its features. Several factors are involved in this case which can easily resolve by
parties.
In this case, judges provide award in against of defendant. According to the rules and
regulation of law no person can provide gratuitous advice to another person. Because it should be
considered as offence. Criminal should be punished for this act which is not enforceable by law.
person who held duty of care against another person have to follow rules, regulation and policies
which is imposed on them as per the provision of law. In case person failed to perform duty of
care then it should be covered under negligence 4. Courts imposed penalty on person equal to
amount specified under law or imposed on them as well. both parties are responsible to maintain
their effective relationship with each other and try to fulfil legal obligation as imposed on them.
They sign written legal document with each and mentioned terms and conditions with mutual
consent. Several duties and responsibilities imposed on them.
They are responsible to understand duties to provide best services to another party and try to
secure their rights and interest as well. try to manage overall transaction conducted by them in
order to attain set of target and objectives as well. they need to comply with rules and regulation
which are imposed on them. Various provision is mentioned under commercial law for the
betterment of broker. Legal rules can protect their rights and interest and maintain their
performance as well in international market.
PART E
ISSUE
4 Folsom RH, Gordon MW, Spanogle JA, Fitzgerald PL, Van Alstine MP. International
business transactions: a problem-oriented coursebook. ThomsonReuters; 2012.
4

In the present case, Safety Gear GmbH is the firm which is engaged in making safety
clothing as well as safety boots in Germany. Company wants to sell its goods and services in
order to earn profit. For the same purpose Safety Gear GmbH form contract with Ali on 1 Jan
2016 in order to sell safety clothing from large or medium construction and manufacturing
business in England. In such selling Ali receive 30% commission on all the orders which are
placed by him for sell goods and services on appropriate price. Such person conduct transaction
on the name of Safety Gear GmbH.
Ali wants to receive better profit so that he also takes order from Scotland without any
information with Safety Gear. He framed contract with the name of such firm. After complete all
transaction Ali looking for commission but he notices that Scottish Orders’ commission is
absent. After he contact with Hot Coats GmbH. Firm explain him that he was not entitled to
receive amount of commission because area should be covered by Jane. Furthermore, person
resign from company at the time of placing an order as well as start work with any other firm.
RULE
As per the Contract Act, two parties can form legal agreement with each other and able to
fulfil their legal obligation which imposed on them. They are bound to follow rules and policies
as discussed by them mutually or imposed on them legally. On the basis of Agency law two
parties comes in contractual relationship with each other and they sign legal document as well
which is known as agreement deed. Parties are known as principal and agent. Furthermore, agent
is person who act on behalf of principal and responsible to perform function as per the guidance
of him. Various duties and responsible to mentioned under law of both parties. Agent have to
deal with third party with the name of his principal only. In case person conduct transaction
outside its power then principal is not responsible to pay debts in that case. They must frame
written document with each other which is considered as prima facie evidence for them.
For example- Ankit is the person who act as agent of John. In that case John instruct him
that not to deal with another party beyond the limit otherwise principal is not responsible to pay
debts on behalf of him. But instead of following the instruction he cross the limit and done act
which is not a part of his activity. In that case principal is not liable and personal liability created
on agent only. So that, Ankit is responsible to pay amount equal to damages caused to another
person and liabilities imposed on them as well.
APPLICATION
5

In the given scenario, Safety Gear GmbH and Ali comes in legal contract with each other
and responsible to comply with legal obligation as imposed on them. Written document signed
by them which consists terms and conditions as mentioned by them with mutual consent. Safety
Gear GmbH appoint Ali in order to sell its goods and services in market for earn better profit.
Such company deal in making safety clothing. It instructs Ali to perform function within
England only not in other country. But he starts business activities in Scotland with the name of
organization. So that, as per the rule of law firm is not responsible to pay commission to Ali
because that area should be covered by Jane but he resigns at the time of placing an order. Safety
Gear GmbH is not responsible to pay debt as incurred after start business activities in Scotland.
Person is responsible to fulfil legal obligation as imposed on them as per the various provision of
law. Ali comes in legal contract with third party in Scotland with the aim of receive 1,00,000
pound. According to the terms and condition, Ali is not able to perform function in other country
without approval of company. In case agent perform act without approval of principal then act
should not be considered as enforceable by law and personal liability created on agent.
But after that company proses him to continue business activities in Scotland and in
future firm should be liable to pay amount of commission equal to efforts made by person for
sell goods and services and get opportunities to earn better profit 5. In case, Safety Gear GmbH
proposes him to conduct function in same country and same proposal should be accept by Ali
then they come in legal contract with each other and after that is responsible to pay amount of
commission equal to the efforts made by them.
CONCLUSION
From the above case it is concluded that as per the agency law agents and principals are
responsible to fulfil their duties and responsible which are imposed on them as per the legal
obligation of them. They have to perform function which is provided to them as per their power
and skills. Both parties have to use their collective efforts in order to attain target with in
stipulated time period. In given case, Safety Gear GmbH instruct agent that he is only
responsible to deal in England only not in other places. But he conducts business activities
beyond the limit which is considered as wrongful act as well as not enforceable by law. IN that
case firm is not liable to pay amount of commission but have to pay amount of commission if
5 Hunter H. Modern Law of Contracts.
6

proposal should be accepting by Ali. As through which both parties are bound tom fulfil rules
and regulation which is imposed on them.
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