Explain the ways in which the contract of agency may be constituted
To talk about the contract of agency, firstly the definitions of contract and agency are requited. According to Gloag (W.Green, 1929), 'contract is an agreement which creates or is intended to create a legal obligation between the parties to it. ' And it 's a really important part in the business, commonly known as legal lynchpin of business activities such as provision goods and services (Gordon, G. 2011). Meanwhile, same capacity rules apply in the law of agency as with other contract.
Agency is known as the relationship between the business and someone else who help them to deal with their business arrangements with others. From what Mclaren said, ‘ agency is a bilateral, onerous, consensual contrace whereby one party, the principal, authorizes another, the agent, to execute business on his behalf.’(Mclaren, Y. 2013). In short, agency is where an agent acts for a principal person and convey his or her will in the course of business. It’s noteworthy to point out that, there are three parts included in an agency relationship, principal, agent and third party. Furthermore, agency is a contractual relationship where it is key to note that both parties to contract of agency must have legal capacity (and must also exist).
Therefore, the contract of agency constituted five main features showing below which will be discussed in turns:
1. Agency relationship created by express appointment
2. Agency relationship created by implied appointment
3. Agency relationship created by ratification
4. Agency relationship created by necessity
5. Agency relationship created by holding out
This relationship is also known as del credere agency. Agency created by express appointment.
From the word 'express ', is easy to tell that there must have been a deliberate and conscious act to lead to the appointment of a person as an agent. The contract of agency is common to other contracts,
Bibliography: 1. W.Gloag, The law of contract, 2nd edn (Edinburgh: W.Green, 1929), p.8 2. Cross, S. (2011). Agency. In G. Black Business Law in Scotland(pp. 297-327). Edinburgh: Thomson Reuters (Professional) UK Limited. 3. Gordon, G. (2011). The Law of Contract. In G. Black Business Law in Scotland(pp. 297-327). Edinburgh: Thomson Reuters (Professional) UK Limited. 4. Doing Business in scotland (2010). Retrieved October 7, 2013 from http://www.taglaw.com/files/Doing%20Business%20Guides/Doing%20Business%20in%20Scotland_0710.pdf