Agency Law Notes
(1) AGENCY RELATIONSHIP?
Agency is an agreement, express or implied, by which the principal entrusts to the agent, the management of the business; to be transacted in his name, or on his account, and by which the agent assumes to do the business and to render an account of it.
Principal, who passes authority to
Agent to effect the legal relations between the principal
Third party, acted with principal through the agent
Section 135 CA (Definition of Agent)
An “agent” is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the “principal”.
Effects of agent:
The agent derives his authority to act for and on behalf of the principal
Made between the principal and the third party through the work of the agent
Creation of Agency
1. Express Appointment
Involved in actual consent of the principal and the agent.
Written or oral form
In commercial transactions it is usual (but not essential) to appoint an agent in writing, so that the terms and extent of the relationship are set down to avoid misunderstanding.
Case: Garnac Grain Co Inc v HMF Faure & Fairclough Ltd
Relationship of P and A can only be established by the consent of the principal and the agent.
Consent must have been given by each of them, either expressly or by implication from their words and conduct.
No consideration is necessary to create an agency.
2. Implied appointment (suggest, but not expressed)
Is by way of the implied consent of the principal and the agent
Derived from words and conduct of the parties in the way they have acted in connection to one another
Case: Chan Yin Yee v William Jacks & Co (Malaysia) Ltd
Any person, irrespective of his competency to contract, may become an agent, for whose acts the principal may be liable to third parties.
Where any person, by words or conduct, represents or