Theories That Seek to Define and Explain Agency

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Theories That Seek To Define and Explain Agency.

1)Power Liability Theory
-Agency exist when a person acquires the power to alter the P’s legal relations with a T so that onlt the P can sue or be sued by the T -Issue: It focuses on external rather than internal aspect of agency. Furthermore some agencies do not fall into that definition i.e. Estate Agents 2)Consent Theory

-Agency is a fiduciary rship that arises when a principal manifests assent to another person (A) that the A should act on the P’s behalf and subject to the P’s control and the A manifests assent or otherwise consents to the acts. -Focuses on the fiduciary relationship

ability to affect the legal rights and obligation of P
Normally invested with a degree of discretion that shows that the P has placed trust and confidence in the A -Keyword: Whether P consented.
-Issue: there are certain situations where agency arises without the consent of P i.e. Agency by Estoppel. 3)Qualified consent Theory

Characteristics of Agency

1)An agent acts on behalf of another so that the P is bound and can sue or be sued by the T on the contract made by the A 2)Agent is not liable on the Contract made between T and P. (subject to authority given) 3)An agency may be created:

a.By express/ implied agreement between P and A
b.By representation from P to T (agency by estoppels)
c.P adopts ratification
d.Necessity
e.By statute.
4)The P is only bound by those acts of the A that are withing the scope of that A’s authority [Jacobs v Morris] – A representation by the A which is outside their authority does not bind the P

Actual Authority

The scope authority is determined by the agreement between P and A. Therefore it is a matter of contract construction. oExpress Actual Authority
oImplied Actual Authority
A who acts out of actual authority may be liable to the T for breach of implied warranty of authority

A) Express Actual Authority. (Authority which P expressly gives to the A)

-[Aviva Life & Pensions UK Ltd v Strand Street Prop (2010)] oExpress authority may be contained in documents and/or conversations between parties -The principle in [ Ireland v Livingston (1872)]

oA will be taken to have obeyed P’s orders and acted within actual authority if the A construes the meaning if the P’s language in a Reasonable way and with an honest desire to perform their duty to him.

-However, the principle above should be used sparingly as was seen in [Patel v Standard Chatered Bank (2001)] oToulson J:
If ambiguity is patent on the face of the document it may well be right to have his instructions clarified by P, it time permits, before acting upon them. oTest: Whether he behaved reasonably in acting upon that interpretation c/f Whether A interpretation was reasonable.

B) Implied Actual Authority (appropriate implications from the surrounding circumstances) Note: IAA cannot contradict EAA

-Agent will have IAA to do those things that are Necessarily Incidental to the execution of the EAA [Rosenhaum v Belson] -A may have authority to undertake that whici is implied from the particular circumstances of the relationship between the P and the A -A may have the authority of someone in that A’s position, trade, business, or profession. Question: What authority would the reasonable person in the position of the T believe that someone in the A’s situation possess? [Hely Hutchinson v Brayhead Ltd (1968)]

-AN A will have such authority as is customarily enjoyed by someone dealing in the particular market. IAA implied by a custom [Robinson v Mallett] Custom must be uniform, certain, notorious, recognised as biding and reasonable Note: Customary authority will not be recognised where it contradicts the express agreement between A and P or the normal duties of those parties or mandatory statutory provisions.

Apparent Authority (Authority of an agent as it appears to others) Issue: T has no knowledge of the terms of the...
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