Agency Han
Agency Han
Agency Han
Ratification
Where the agent is acting without authority, if the principal wants to
enforce the contract against the third party, he can ratify the
contract.
Apparent authority
Summers v. Saloman (1857) 26 L.J.K.B. 301
The defendant employed his nephew as manager to run his jewellery shop
in Sussex and regularly paid for jewellery which the nephew ordered
from the plaintiff for resale in his shop. The nephew left the shop
and the agency was terminated. He went to London, obtained goods from
the plaintiff in the defendant's name and then absconded with them.
The defendant was held liable to pay for the goods.
Crompton J:
`As soon as you have given the agent authority to pledge your credit,
you render yourself liable to parties who have acted upon notice of
such authority until you find the means of giving them notice that the
authority is determined'.
Coleridge J:
`The question is not what was the actual relation between the
defendant and his nephew, but whether the defendant had not so
conducted himself as to make the plaintiff suppose the nephew to be
the defendant's general agent."
Daun v. Simmins (1879) 41 L.T. 783
The principal, who had employed the agent to manage a tied house (a
pub which is owned by a particular beer company and which only sells
that company's products) which was in his name, expressly prohibited
the agent from purchasing spirits from X. The agent ignored his
principal's instructions, purchased spirits from X and then failed to
pay for them. In an action by X against the principal it was held that
the latter should not be liable for the unauthorised acts of the agent
since the third party dealing with the agent was a person involved in
1
the trade and should have known that the house was tied and therefore
not allowed to purchase spirits from elsewhere.
1. Undisclosed principal
...the law can be summarised shortly as follows. (1) An undisclosed
principal may sue and be sued on a contract made by an agent on his
behalf, acting within the scope of his actual authority.
(2) In
entering into the contract, the agent must intend to act on the
principals behalf. (3) The agent of an undisclosed principal may
also sue and be sued on the contract. (4) Any defence which the third
party may have against the agent is available against his principal.
(5) The terms of the contract may, expressly or by implication,
exclude the principals right to sue, and his liability to be sued.
: Lord Lloyd in Siu Yin Kwan v. Eastern Insurance Co. Ltd. [1994] 1
All E.R. 213, 220 (Privy Council).
Where the personal element is strikingly present in the contract made
with the agent, the undisclosed principal may not intervene.
Said v. Butt [1920] 3 K.B. 497
Butt, who was the managing director of a theatre, had for
some time been involved in a dispute with Said. Twice
Saids personal application for a ticket had been
refused. Therefore, he employed Pollock as his agent to
acquire a ticket for him without disclosing his name. On
his arrival at the performance, Said was refused
admittance and in consequence he brought an action against
Butt for breach of contract.
McCardie J (proceeding upon the assumption that the
contract in cases of undisclosed agency is concluded
between the principal and the third party) held that this
contract was affected by mistake as to the identity of the
contracting party and Said's action therefore failed.
An undisclosed principal cannot be prevented from intervening on his
agent's contract merely because the third party would not have
2
(1) Where an agent acts within the scope of its authority and the
third party neither knew nor ought to have known that the agent was
acting as an agent, the acts of the agent shall affect only the
relations between the agent and the third party.
(2) However, where such an agent, when contracting with the third
party on behalf of a business, represents itself to be the owner of
that business, the third party, upon discovery of the real owner of
the business, may exercise also against the latter the rights it has
against the agent.
a. How best to explain?
i.