Agency. Express Actual Authority

Topics: Contract, Contractual term, Agency law Pages: 20 (5489 words) Published: August 28, 2012

* Sec. 3 of the Civil Law Ordinance states as follows:
“In all questions or issues which may hereafter arise or which may have to be decided in Ceylon in respect of the law of partnerships, corporations, banks ad banking, principals and agents, carriers by land, life and fire insurance. The law to be administered shall be the same as would be administered in England, In the like case as the corresponding period, if such question or issue had arisen or had to be decided in England, unless in any case other provision are or shall be made by an any enactment now in force in Ceylon or hereinafter to be enacted.

• Even though English Law would apply generally with regard to the Law of Agency, the matter of the capacity of the parties in a contract of Agency would be governed by Roman Dutch Law (RDL) principles. The rules are as follows- o P must have capacity – to be enforceable

o 3rd Party must have capacity
o Agent does not generally require capacity. But A’s lack of capacity will affect ▪ The contract of agency between P and A
▪ An action against the agent by the 3rd party for breach of warranty of authority.


Actual authority may arise from express agreement or from implied agreements. Where the principal expressly appoints an agent to do some act or enter into some contract on his behalf the Agent has express authority. If the instructions are not clear he should get a clarification but if he cannot contact the Principal he can act on a reasonable construction of the instructions even though it may not be what the principal intended.

Generally no particular form is required for the granting of actual authority. Ie. It is not necessary that the agent must be appointed by some special procedure or in writing. However, there are certain exceptional situations in which it is necessary to appoint an Agent in writing. a) s. 27 of the CPC [provided that the appointment of the registered Attorney in a civil case has to being writing and signed by the client and filed in Court. b) According to S. 133 of the Companies Act No. 17 of 1982 the appointment of eh Agent to vote at or participate in a meeting of the Company on behalf of a shareholder has to be in writing and deposited with the Company before the meeting. (The document by which the appointment is made is referred to as a proxy form) c) A power of Attorney within the meaning of Sec 2 of the Power of Attorneys Ordinance (CH 140) should be in writing. d) S. 33(5) of the Code of Intellectual Property requires that the appointment of an agent to register an industrial design has to be by way of a power of attorney.

Express Actual Authority


1) Person is authorized to act as Agent by the Principal on his own initiative

2) Agreement between A and P need not be a contract
A can undertake to act gratuitously – sufficient if there is consent by A to his exercising authority on behalf of P.

Difference between Contractual and Consensual Agency

i) Contractual – consideration present
Consensual (gratuitous) – No consideration
ii) Contractual – Obligation on the part of P to remunerate A Consensual (gratuitous) – Agent right to indemnify for loses sustained and expenses incurred

3) No formality required to appoint Agent
Heard v. Pilley – Contract for purchase of land made by A enforced though A was not appointed in writing. But if A is to execute an instrument under seal, he must be appointed by an instrument under seal (a power of attorney)


(1)Types of Agency
Special Agent – authorized to do specific acts
General Agent – Can do anything coming within certain limitations Universal Agent – unlimited authority

(2)Extent of authority - depends on true construction of words of appointment / usages of trade / course...
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