TYPES OF AGENTS

Aim To introduce you to the various types of agents and the scope of their authority

Introduction
This unit addresses the types of agents. In order to have a birds eye view of how these agents operate to bind their principals, the unit also examines the scope and nature of the agents authority. The unit preludes the discussion by providing a definition of agency.

Definition
"Agency is the relationship that exists between two persons when one, called the agent, is considered in law to represent the other called the principal, in such a way as to be able to affect the principals legal position in respect of strangers to the relationship by the making of the contracts or the disposition of property." Fridman, (1990) P.,9. Q What are the constituent elements of an agency relationship?Please read the following cases: R v Gallagher [1986] 219. Sorrell v Finch [1977] AC 728. Boardman v Phipps [1967] 2 AC 46.

Creation of Agency
This can arise in any of the following ways, namely through contract, from ratification and by estoppels

Contract
Here the agency comes into being as a result of the stipulations of the parties orally or in writing. It may also arise as a result of the conduct of the parties. Please read the case of Pole v Leask (1860) 28 Beav 562

Ratification
This is the confirmation by the principal, of unauthorised (but legal) acts done by the agent. The principal later endorses the acts of the agent so as to confer authority on the agent to proceed with the action. Q What are the basic elements of ratification?Please read the following cases: Firth v Staines [1897] 2 QB 70. Barclays Bank Ltd v Roberts [1954] 3 All ER 107. Boston Deep Sea Fishing Co v Farnham [1957] 3 All ER 204.

Estoppel
Where representations have been made by an agent inducing a third to enter into a contract, a supposed principal will be denied the liberty to walk out of such an agency if he/she knew of the representations but did not take steps to avoid the transaction. Q What are the basic elements of estoppel?Please read the following cases: Lloyds Bank Ltd v Chartered Bank of India, Australia & China [1929] 1 KB 40. Rama Corp Ltd v Proved Tin & General Inv Ltd [1952] 2 QB 147

Principal-Agent Relationship
The relationship of the principal to an agent can be defined in terms of the scope of authority that underlines the relationship. This authority may be actual or implied. Each strand of authority is governed by different legal consequences. Q How would you define authority from the point of view of agency? Please read the case of Wilkinson v General Accident Fire Co. Ltd [1967] 2 Lloyds Rep 182.

Actual authority
This is authority as defined by the express terms of the agency contract between the principal and the agent. Please read the following cases: Freeman & Lockyer v Buckhurst Park (Mangal) Ltd [1964] 1 All ER 630. Hely-Hutchinson v Brayhead Ltd [1968] 1 QBD 549. It is possible for an authority to be couched in a deed.Please read the cases of: Re Wallace, ex p Wallace (1884) 14 QBD 22; Newhart Dev Ltd v Co-operative Bank [1978) 2 All ER 896; Ericksen Industries Ltd v Chevron Canada Resources Ltd (1987) 53 Alta LR (2d) 35.

Implied Authority
This is authority not expressly provided for but, is deduced as being incidental to the execution of the actual authority. Please read the following cases: Butwick v Grant [1924] 2 KB 483. Watteau v Fenwick [1893] 1 QB 346. Jerome v Bentley & Co [1952] 2 All ER 114. Q How does implied authority differ from ostensible or apparent authority?Please read the case of Mullens v Miller (1882) 22 ChD 194.

Types of agents
(a) General agent. This is an agent who has the principals unlimited authority to carry out contracts on behalf of the principal without recourse to the principal on each and every point in a transaction.Please read the case of Swiss Air v Palmer [1976] 2 Lloyds Rep 604.

(b) Agent of necessity

Here, the agency comes into being as a result of circumstances. There is no formal appointment, express or otherwise. The agent steps into the agency with a view to minimise damages or loss to the goods of principal. Please read the case of China Pacific SA v Food Corporation of India [1982] AC 939.

(c) Del Credere agent

. This agent undertakes to guarantee the goods or indemnify the principal for any losses arising from the agency transaction. In return for this assurance, the agent receives an extra remuneration from the principal. Please read the case of Churchill & Sim v Goddard [1937] 1 KB 92

(d) Factor
The basic feature of the agent is that the agent has possession of the goods before sale. In this case, such an agent can sell in his/her own name and may even pledge the goods as security to raise money in the name of the principal. Please read the case of Stevens v Biller (1883) 25 Ch D 31 and Section 1 of the Factors Act 1889.

(e) Special Agent

This is an agent who has been appointed to carry out only a designated task. On completion of the task, the agency terminates. Example, a polling agent.

(f) Broker
This is an agent who does not have possession of the goods at the time of sale. The transaction concluded by such an agent on behalf of the principal, nevertheless binds the principal.Please read the case of Barring v Corrie (1818) 2 B & Ald 137.