- •Commercial Law
- •Contents
- •Preface
- •Abbreviations
- •Table of Statutory Provisions
- •Table of Cases
- •1 Introduction
- •1 Introduction
- •2 What is agency?
- •3 Nature and characteristics of agency
- •4 The different types of agency
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 The authority of an agent
- •3 Agency by ratification
- •4 Agency of necessity
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 Duties of an agent
- •3 Rights of an agent
- •4 Commercial agents and principals
- •5 Disclosed agency
- •6 Undisclosed agency
- •7 Termination of agency
- •8 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of the sale of goods
- •4 Equality of bargaining power: non-consumers and consumers
- •5 Impact of the European Union
- •6 Contract of sale
- •7 Contracts for non-monetary consideration
- •8 Contracts for the transfer of property or possession
- •9 Recommended reading
- •1 Introduction
- •2 Background
- •3 Sale of Goods Act 1979, section 12: the right to sell
- •4 Sale of Goods Act 1979, section 13: compliance with description
- •5 Sale of Goods Act 1979, section 14(2): satisfactory quality
- •6 Sale of Goods Act 1979, section 14(3): fitness for purpose
- •7 Sale of Goods Act 1979, section 15: sale by sample
- •8 Exclusion and limitation of liability
- •9 Acceptance
- •10 Remedies
- •11 Recommended reading
- •1 Introduction
- •2 Background to the passage of property and risk
- •3 Rules governing the passage of property
- •4 Passage of risk
- •5 The nemo dat exceptions
- •6 Delivery and payment
- •7 Remedies
- •8 Recommended reading
- •1 Introduction
- •2 Background
- •3 Provision of Services Regulations 2009
- •4 Supply of Goods and Services Act 1982
- •5 Recommended reading
- •1 Introduction
- •2 Background
- •3 Electronic Commerce (EC Directive) Regulations 2002
- •4 Distance selling
- •5 Recommended reading
- •Introduction
- •1 Introduction
- •2 CIF contracts
- •3 FOB contracts
- •4 Ex Works
- •5 FAS contracts
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction and background
- •2 Structure and scope
- •3 UNIDROIT Principles of International Commercial Contracts
- •4 Conclusion
- •5 Recommended reading
- •1 Introduction and background
- •2 Open account
- •3 Bills of exchange
- •4 Documentary collections
- •5 Introduction to letters of credit
- •6 Factoring
- •7 Forfaiting
- •8 Conclusion
- •9 Recommended reading
- •1 Introduction
- •2 Hague and Hague-Visby Rules
- •3 Charterparties
- •4 Time charterparty
- •5 Common law obligations of the shipper
- •6 Common law obligations of the carrier
- •7 Bills of lading
- •8 Electronic bills of lading
- •9 Conclusion
- •10 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of negligence
- •4 The move to strict liability
- •5 Types of defect
- •6 Developments in strict liability
- •7 Recommended reading
- •1 Introduction
- •2 Personnel
- •3 Meaning of ‘product’
- •4 Defectiveness
- •5 Defences
- •6 Contributory negligence
- •7 Recoverable damage
- •8 Limitations on liability
- •9 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Enforcement strategy
- •4 Criminal law controls
- •5 Civil law enforcement
- •6 Recommended reading
- •1 Introduction
- •2 Scope of the 2008 Regulations
- •3 Prohibition against unfair commercial practices
- •4 Codes of practice
- •5 Misleading actions
- •6 Misleading omissions
- •7 Aggressive commercial practices
- •8 Commercial practices which are automatically unfair
- •9 Offences
- •10 Recommended reading
- •1 Introduction
- •2 Background
- •3 Controls over misleading advertising
- •4 Comparative advertising
- •5 Promotion of misleading or comparative advertising
- •6 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 History of banking regulation: early policy initiatives
- •3 New Labour and a new policy
- •4 The Financial Services Authority
- •5 The Coalition government
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction
- •2 What is a bank?
- •3 What is a customer?
- •4 Bank accounts
- •5 Cheques
- •6 Payment cards
- •7 Banker’s duty of confidentiality
- •8 Banking Conduct Regime
- •9 Payment Services Regulations 2009
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 European banking regulation
- •3 The Financial Services Authority
- •4 Financial Services Compensation Scheme
- •5 Financial Ombudsman Scheme
- •6 Financial Services and Markets Tribunal
- •7 The Bank of England
- •8 Bank insolvency
- •9 Illicit finance
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 Evolution of the consumer credit market
- •3 Consumer debt, financial exclusion and over-indebtedness
- •4 Irresponsible lending
- •5 Regulation of irresponsible lending
- •6 Irresponsible borrowing
- •7 Ineffective legislative protection for consumers
- •8 A change of policy
- •9 Lessons from the United States
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 Crowther Committee on Consumer Credit
- •3 Consumer Credit Act 1974
- •4 Formalities
- •5 Cancellation of agreements
- •7 Documentation of credit and hire agreements
- •8 Matters arising during the currency of credit or hire agreements
- •9 Credit advertising
- •10 Credit licensing
- •11 Unfairness test
- •12 Other powers of the court
- •13 Financial Ombudsman Service
- •14 Enforcement
- •15 Consumer Credit Directive
- •16 Conclusion
- •17 Recommended reading
- •Bibliography
- •Index
49 |
5â Disclosed agency |
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If the commercial agent is granted indemnity, he is still entitled to seek damages from the principal.124 The commercial agent is permitted to seek compensation for damage suffered as a result of the termination of the agreement and relations with the principal. In particular, the 1993 Regulations provide that:
such damage shall be deemed to occur particularly when the termination takes place in either or both of the following circumstances, namely circumstances which (a) deprive the commercial agent of the commission which proper performance of the agency contract would have procured for him whilst providing his principal with substantial benefits linked to the activities of the commercial agent; or (b) have not enabled the commercial agent to amortise the costs and expenses that he had incurred in the performance of the agency contract on the advice of his principal.125
However, compensation will not be payable to the commercial agent where:
(a) the principal has terminated the agency contract because of default attributable to the commercial agent which would justify immediate termination of the agency contract; or (b) the commercial agent has himself terminated the agency contract, unless such termination is justified (i) by circumstances attributable to the principal, or (ii) on grounds of the age, infirmity or illness of the commercial agent in consequence of which he cannot reasonably be required to continue his activities; or (c) the commercial agent, with the agreement of his principal, assigns his rights and duties under the agency contract to another person.126
Q4 What are the obligations and duties of a commercial agent?
5â Disclosed agency
A disclosed agency can take different forms.127 The principal may be classified as a ‘disclosed principal’, which means that the third party is aware of the identity of the principal; or, the principal may be referred to as an ‘unnamed principal’, meaning that the third party may be aware of the principal’s existence but be uninformed of the principal’s precise identity. A disclosed principal could also be one who has ratified the unofficial act of his agent.128
The general rule is that where an agent enters into a contract and discloses the existence of an agency, this could result in the principal being sued on the contract he has authorised.129 A similar position arises where the agent exceeds his actual authority, but nonetheless has apparent authority, and the principal ratifies the agreement.130 Cheng-Han stated:
In cases of disclosed agency, where the agent has acted within the scope of his authority, it is clear that the acts in question are to be treated in certain respects
124 |
Ibid. reg. 17(5).â 125â Ibid. reg. 17(7).â 126â Ibid. reg. 18. |
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127 |
Munday, above n. 1, at 226.â |
128â Ibid. |
129 |
Bradgate, above n. 11, at 161.â |
130â Ibid. |
50 |
Relations between a principal and agent |
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as if they were acts of the principal. Accordingly, where the agent has entered into a contract with a third party within the scope of his authority, the contract is treated as that of the principal.131
In determining the obligations and liability of the disclosed principal, it is very important to consider the ambit of the agent’s authority.132 For example, in
Camillo Tank Steamship Co. Ltd v. Alexandria Engineering Works, the House of Lords construed the term ‘approve’ to mean that the agent’s authority included his ability to agree to the debt on behalf of his principal,133 therefore holding that the ‘principal could not evade liability to the third party’.134 Conversely, if the agent operates outside the extent of his authority and the principal has not ratified his actions, the principal will be prevented from commencing legal proceedings or being subject to them.135
If it is possible to prove that the third party did have notice of the agent’s lack of authority, the principal will not be bound by the actions of his agent. For example, in Jordan v. Norton, a father wanted to purchase a horse on behalf of his son, and wrote to the seller stating that the horse must come with a warranty that it was ‘sound, and quiet in harness’. The son took delivery of the horse, but there was no assurance from the seller that the horse was ‘sound, and quiet in the harness’. The court determined that the father was allowed to disclaim the agreement because the son had been ordered to take delivery of the horse only if it was accompanied by a warranty. Markesinis and Munday took the view that as the ‘owner failed to give the warranty, but delivered the mare to the son … the father was not bound by the son’s acts’.136
The discussion above has set out the general rules of a disclosed agent. However, there are a number of exceptions to these rules, some of which will be briefly discussed below.
(a)â Foreign principals
There was at one time a general rule that if an agent entered into a contract for a foreign principal, the agent and not the principal would obtain rights and liabilities.137 However, this position was emphatically overruled by the Court of Appeal in Teheran-Europe Co. Ltd v. S. T. Belton (Tractors) Ltd,138 which has been followed in Novasen SA v. Alimenta SA.139
131T. Cheng-Han, ‘Undisclosed principals and contract’ (2004) 120 Law Quarterly Review (Jul.) 480, 488.
132 Munday, above n. 1, at 226.â 133â (1921) 9 Ll. L Rep. 307.
134Munday, above n. 1, at 226.
135See, e.g., the decision in Comerford v. Britannic Assurance Co. Ltd (1908) 24 TLR 593.
136Markesinis and Munday, above n. 44, at 157.
137See Elbinger AG fur Fabrication von Eisenbahn Material v. Claye (1873) LR 8 QB 313.
138[1968] 2 QB 545.
139[2011] EWHC 49 (Comm); [2011] 1 Lloyd’s Rep. 390.
51 |
5â Disclosed agency |
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(b)â Agent a party to the contract
If an agent enters into a contract which provides that he is a party to the contract, the agent will be jointly legally responsible. Conversely, where there is no such express declaration, the agent’s liability depends on the interpretation and construction of the contract.140
(c)â Deeds
If a contract is entered into under seal, there are a number of special rules. If a principal is not named as party to such a contract or it is not executed in his name, the principal may not sue or be sued for breach of contract.141 However, if the agent executes the deed, he is liable under it and is also able to enforce it to the exclusion of the principal. An exception to this rule relates to the execution of deeds via a power of attorney.142
(d)â Bills of exchange
If an agent signs a bill of exchange, he may become liable under it, as the Bills of Exchange Act 1882 provides that the person who signs the bill becomes personally liable. Section 23 of the Act provides that:
no person is liable as drawer, indorser, or acceptor of a bill who has not signed it as such: provided that (1) where a person signs a bill in a trade or assumed name, he is liable thereon as if he had signed it in his own name; (2) the signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm.
However, the signatory will not be liable if he is acting in a representative capacity:
Where a person signs a bill as drawer, indorser, or acceptor, and adds words to his signature, indicating that he signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability.143
(e)â Custom
It is possible for an agent to acquire liability on a contract if there is a trade custom to that effect.
140Bradgate, above n. 11, at 163.
141See, e.g., Re International Contract Co.; Pickering’s Claim (1870–71) LR 6 Ch. App. 525. For an illustration of this rule in operation see Shack v. Anthony (1813) 1 M & S 573 and Harmer v. Armstrong [1934] Ch. 65.
142See, e.g., Power of Attorney Act 1971, s.7.
143Bills of Exchange Act 1882, s.26(1).