BTF1010 Lecture Notes - Lecture 1: Estoppel
6 Jun 2018
School
Department
Course
Professor
Business Relationships and the Law
Law of Agency
Agency: A word used in the law to connote an authority or capacity in one person to create legal relations
(usually contracts) between a person occupying the position of principal and third parties
• Independent contractors and employees may be an agent but not for their employers
• The principal: owns the assets
Principal
Authorises agent to act
Third Party Agent
Contract created with principal Acts with third party on behalf of principal
Examples of agency:
• Partners are agents of each other (Principals in the firm)
• Directors/employees are agents of the company
• Sale/lease of land (estate agents)
• Purchase and sale of shares (stockbrokers)
Case: International Harvester Co of Australia v Carrigan’s Hazeldene Pastoral Co
• Carrigan bought a machine from a machinery supplier, who called themselves an ‘agent’
• The HCA decided that the contract was between the ‘agent’ and Carrigan not Carigan and
International Harvester
Functions of an agent
The Agent may:
• Make contracts on behalf of the principal
• Makes representations on behalf of the principal
• Receive representations on behalf of the principal
• Pay monies on behalf of the principal
• Receive monies on behalf of the principal
Creation of agency
• Express agreement: Principal instructs Agent to do something and the Agent agrees
• Ratification: Agent didn’t have authority to do something and still does it. When Princiapl finds out,
agrees with decision
Document Summary
Agency: a word used in the law to connote an authority or capacity in one person to create legal relations (usually contracts) between a person occupying the position of principal and third parties. Independent contractors and employees may be an agent but not for their employers: the principal: owns the assets. Contract created with principal acts with third party on behalf of principal. Examples of agency: partners are agents of each other (principals in the firm, directors/employees are agents of the company, sale/lease of land (estate agents, purchase and sale of shares (stockbrokers) The agent may: make contracts on behalf of the principal, makes representations on behalf of the principal, receive representations on behalf of the principal, pay monies on behalf of the principal, receive monies on behalf of the principal. Creation of agency: express agreement: principal instructs agent to do something and the agent agrees, ratification: agent didn"t have authority to do something and still does it.
