Flashcards in The Law of Agency Deck (55)
Tell about Keep accounts case Tyler v Logan 1904
The manager of a shop was liable to make up a deficiency which came to light as a result of a stock take even though there was no evidence of dishonesty.
Tell about duty of good faith /fiduciary duty
A fiduciary duty which is owed by agent to the principal as the base for the whole relationship, tied and shaped by on good faith. Need to act in the best interest of the principal shapes all the duties owed by an agent.
Tell about the duty to act personally
Delegatus non potest delegare - agent cannot delegate. There may be exceptions - e.g. architects or other special skills required for specific tasks. Delegation can be implied by facts and circumstances of the agency or particular practice in the industry
Tell about delegation case De Bussche v Alt 1878
Sub-agent will owe duties to the principal. An agent undertook to sell the principal’s ship, the agent’s partner purchased the ship himself and then sold it on for an immense profit ($160,000 compared to his $90,000 purchase price, in the 1870s), court ruled partner was liable, as sub-agents cannot be sued. The partner was to be treated as a co-agent, so could be sued for the missing 70000 which the principal was deprived off.
Tell about duty to account
Different from duty to keep accounts, which refers to transactions during agency. Account for all benefits received by the agent during the period of agency. (All potential secret profits or benefits earner or retained.) Agent is not supposed to take bribes.
Tell about duty to account case Neilson v Skinner & Co 1890
account to the principal for any benefits received from third parties, in whatever form they are received
Tell about duty not to disclose any confidential information
Must maintain confidentiality and protect sensitive information during and after. Under a duty not to disclose or to make use of that information.
Tell about confidentiality case Liverpool Victoria Friendly Society v Houston (1900)
Information remains confidential - 4 years after Houston worked for LV he disclosed their customer list. Tried to argue he was no longer an agent but this was not allowed.
Tell about the duty to avoid conflict of interest
Must not put himself in a position where his interests will conflict with the principals interests. Failure is a risk which may lead to allegations of making secret profits and liability to account to the principle for that profit.
Tell what happens if secret profits are not disclosed appropriately
Principal is entitled to terminate the contract and the agent will lose any entitlement to be paid for the period of the contract during which the breach continues. You need to mention in the agency agreement if you want that they only work for you, clauses cannot be added later.
Tell about conflict of interest case Lothian v Jenolite Ltd 1969
The court decided that it was not necessarily the case that every agency contract has an implied condition that the agent is not entitled to act for a competitor. Not employed as full time nor exclusive agents
Tell about conflict of interest case McPherson's Trustees v Watt 1877
Solicitor buying by proxy of some of the houses in his care. Let personal interest conflict with the business - Watt sold 4 properties on behalf of the trustees. Selling to his brother for a discounted price. This case highlights you must be honest in your transactions
Tell what are the rights of an agent (3)
- Indemnity for services performed
- Lien over property
What does a lien mean?
A legal claim - charge upon real or personal property for the satisfaction of some debt or duty
Tell ways to terminate an agency agreement(3)
1) Termination by the agent or principal
2) Termination under the agency contract
3) Termination by frustration
Tell about factors of termination by the agent of principal (2)
1) Parties agree to terminate agency (mutuality)
2)Principal may terminate without agent's consent (clause; notice to third party, either party can be liable when the agency is not properly terminated)
Tell about termination under the agency contract (3)
- Provision in the contract for termination (e.g. one off)
- Fixed time period
- Purpose of the agency has been fulfilled or come to an end
Tell about termination by frustration (6)
-Occurrence of unexpected events which are out of the control of both parties
-Personal bankruptcy (sequestration)
-Discontinuance of principal's business
What happens when agency is terminated by frustration?
Either parties have no further or ongoing obligations.
AQ: What is meant by tripartite relationship?
Know for the exam p. 17
AQ: What is the difference between general and special agent?
Know for the exam p.17
AQ: Briefly list and describe 5 ways in which an agency can be created.
-Creation by ratification
-Creation by necessity
-Creation by holding out
AQ: What are the conditions needed to establish agency by ratification?
• Agent must be action in the capacity of an agent and disclose this to a 3rd party
• Principal must be in existence at the time of the transactions, reachable
• Principal must have capacity to take the action in question
• The principal must be within relevant timescale
• Action being ratified must be legal
Principal needs to be fully aware of the agents actions
AQ: Briefly list the duties and rights of an agent
p. 18 table