Agency - CONTRACT LAW

1. Agency is a legal relationship where one party (principal) allows another party (agent) to act on their behalf in business transactions.

2. Types of agencies include:

a. Actual Agency: Agent has express or implied authority to act on behalf of the principal.

b. Apparent Agency: Principal leads third parties to believe an individual is acting as their agent, when in fact they are not.

c. Ratification: Principal approves actions of an agent who did not have prior authorization.

d. Agency by Necessity: Agency formed in emergent situations where principal cannot act.

Formation of Agency Relationship

1. An agency relationship can be created through:

a. Express agreement between principal and agent.

b. Implied agreement based on actions and conduct of parties.

c. Estoppel, where third parties rely on agent representing themselves as authorized.

d. Operation of law in certain circumstances.

Case Study: Example of Creation of Agency

- In the case of Smith v Hughes (1871), a seller appointed an agent to sell oats, but the agent sold old oats instead of new ones. The court held the agent liable for breach of contract, as the agent's actions were not within the authority granted by the principal.

Authority of Agents

A. Types of Authority

1. Actual...