Business Law

Topics: Contract, Business law, Agency law Pages: 6 (1984 words) Published: April 2, 2013
Assignment Submission Form

Module Name| Commercial and Company Law in Semester 2.|
Name of Lecturer| Sheila McCarthy|
| |
Title of Assignment| Law CA Semester 2 -2013|
| |
| |
Campus| LIT Tipperary Thurles|
Course | Bachelor Of Business Level 7|
Student ID(s)| P10011462|
Name of Student(s)| Martin G Lynch|
Date| 13/03/13|
Word Count| 2004|

I declare that no element of this assignment has been plagiarised: Student Signature| |
“An Agent is a person who is authorised to act for another, the Principal in the making of legal relations with third parties”

Discuss this statement and give examples and referring to case law when answering.

To full discuss the statement above we will examine the relationship of an Agent in the context of company law. It is important for people to understand what an Agent is, and the legal bearing they can have on companies and organization is when acting on their behalf. Irish companies have been using such agents for decades. This enables them to take advantage of an agent's local understanding or existing trade acquaintances. An agency relationship arises where an “individual”, known as the Agent is authorised to enter into negotiations for the Principal. These negotiations are reconised through a binding contract between the third party and the principal. On conclusion, obligations of the contract are the responsibility of the Principal and the Third Party. The Principal can only be bound by a contract entered into on their behalf if the Agent had the legal capacity to enter into such an agreement.

An Agency relationship can arise by:
1. Express Authority
2. Implied Authority
3. Apparent or Ostensible authority
4. Agency By Ratification
5. Agency By Necessity
6. Agency By Estoppel

Express Authority
Where an agent's power to act on behalf of a principal will be explicitly granted to the agent by an agreement between the agent and principal. The agent’s authority can be contracted written or orally. Implied Authority

This gives agent's the power to act on behalf of a principal. The principal because of the principal’s actions may grant this. The failure to object after prior exercise of such power to the agent or failure by the principal to engage this implied authority in an express authority agreement may give rise to implied authority been authorised to the agent. Apparent or Ostensible authority

This is a type of agency power that arises when third party reasonably believes an agent has the authority to act on behalf of the principal. Apparent authority typically becomes important where an agent purports to take some action on behalf of a principal, such as signing a contract, which the agent did not have, actual authority to do. If the third party reasonably believes the agent has that authority, then the principal will be bound to the contract. Hely-Hutchinson v Brayhead Ltd [1968] (1) is a UK company law case on the authority of agents to act for a company. Lord Suirdale (Richard Michael John Hely-Hutchinson) sued Brayhead Ltd for losses incurred after a failed takeover deal. The CEO, chairman and de facto managing director of Brayhead Ltd, Mr. Richards, had guaranteed repayment of money, and had indemnified losses of Lord Suirdale in return for injection of money into Lord Suirdale's company Perdio Electronics Ltd. Perdio Ltd was then taken over by Brayhead Ltd and Lord Suirdale gained a place on Brayhead Ltd's board, but Perdio Ltd's business did not recover. It went into liquidation, Lord Suirdale resigned from Brayhead Ltd’s board and sued for the losses he had incurred. Brayhead Ltd refused to pay on the basis that Mr. Richards had no authority to make the guarantee and indemnity contract in the first place. ( Roskill J held Mr. Richards had apparent authority to bind Brayhead Ltd, and the company appealed. In his judgment Lord Denning MR held that he did have authority,...

An Introduction To Irish Company Law 3rd Edition Author Gráinne Callanan
The Law of Companies, 3rd edition Thomas B. Courtney
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Business Entities Outline Essay
  • Business Law Chapter 31 Notes Essay
  • Business Law Essay
  • business law Essay
  • Forms of Business Organisation Essay
  • law of agency Essay
  • Commercial Law
  • Essay on agency

Become a StudyMode Member

Sign Up - It's Free