Law of Agency

Topics: Contract, Agency law, Agency Pages: 15 (5887 words) Published: May 22, 2013
The need to appoint another person to perform one act or another on one’s behalf assumes greater proportion daily. This is so because of the rapid economic developments that has taken place in the recent years. A party may want to do many things but because of lack of time or expertise, he is compelled to appoint another person to act on his behalf and whatever that other person does will be binding on him. The question is: ‘Who is an agent?’ An agent is one who acts on behalf of another called the principal. The agent has power to affect the principal’s legal position vis-à-vis a third party e.g. by entering into a contract or disposing of the property of the principal. Agency has been defined in different ways by different scholars. According to Fridman in his book ‘Law of Agency,’

‘Agency is the relationship that exists between two persons when one called the agent is considered in law to represent the other called the principal in such a way as to be able to affect the principal’s legal position in respect of strangers to the relationship by the making of contracts or the disposition of property.’ Bowstead has defined agency as:

‘The relationship that exists between two persons one of whom expressly or impliedly consents that the other should represent him or act on his behalf and the other of whom similarly consents to represent the former or so to act.’ Prof. Powell defined an agent as:

‘A person who is authorized to act for a principal and who has agreed so to act and who has the power to affect the legal relationship of his principal vis-à-vis a third party.’ The American restatement of the law of agency defines agency as: ‘The relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control and consent.’ In the case of Ikemefuna C. Amadiume & Anor v. Mrs Agnes Solomon Ibok (2006) All FWLR pt 321 pg. 1247, the Court of Appeal defined an agent as: ‘Any person who acts for another in the capacity of deputy, steward, rent collector or any other agent or trustee on oath.’ Also, in E.A. Okoyode v. FCDA (20006) All FWLR pt 298 pg 1200 at 1405, the Court of Appeal also defined an agent as ‘One who is authorized to act for or in place of another.’ Here, the Court of Appeal was actually quoting the Black’s Law Dictionary 7th edition. Seavey defined agency as:

‘A consensual relationship.’
This Seavey’s definition has received judicial approval in Garnac Grain Company Ltd v. HMF Faure & Fair Clough Ltd. (1967) 2 All ER pg 353. In that case, Lord Pearson said, ‘The relationship of principal and agent can only be established by consent of the principal and the agent. They would be held to have consented if they had agreed to what amounts in law to such a relationship even if they do not recognize it themselves and even if they have professed to disclaim it.’ Note that this statement has been criticized by Fridman. This is because this idea of consent as the basis of agency relationship is contestable because there are circumstances in which the agency relationship exists without the consent of the parties or even against the wishes of either one of them or even both of them. See for example Phibbs v. Boardman (1965) 1 All ER pg 849. In that case, the defendant who was not appointed as an agent but acted as one and made secret profits was compelled by the court to yield over the secret profits to the beneficiaries. This shows that some of the obligations of an agent are imposed by the law regardless of the agreement of the parties. There are other instances in which agency relationship is not by consent but by operation of law. Examples are agency of necessity and a deserted wife’s right to pledge the husband’s credit.

Agent and Trustee
An agent and a trustee occupy similar position. Both the agent and the trustee deal with the property...
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