Agency in English law - AbsoluteAstronomy.com

Agency in English law is a component of UK commercial law, and forms a core set of rules necessary for the smooth functioning of business.

Authority

An agent who acts within the scope of authority conferred by her principal binds the principal in the obligations she creates against third parties. There are essentially two kinds of authority recognised in the law: actual authority (whether express or implied) and apparent authority.

Actual authority

Actual authority can be of two kinds. Either the principal may have expressly conferred authority on the agent, or authority may be implied. Authority arises by consensual agreement, and whether it exists is a question of fact. An agent, as a general rule, is only entitled to indemnity from the principal if she has acted within the scope of her actual authority, and may be in breach of contract, and liable to a third party for breach of the implied warranty of authority.

Express actual authority
Express actual authority means an agent has actually been expressly told she may act on behalf of a principal.

Ireland v Livingstone (1872) LR 5 HL 395

Implied actual authority
Implied actual authority, also called "usual authority", is authority an agent has by virtue of being reasonably necessary to carry out his express authority. As such, it can be inferred by virtue of a position held by an agent. For example, partners have authority to bind the other partners in the firm, their liability being joint and several, and in a corporation, all executives and senior employees with decision-making authority by virtue of their position have authority to bind the corporation.

Hely-Hutchinson v Brayhead Ltd
Hely-Hutchinson v Brayhead Ltd
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 is a UK company law case on the authority of agents to act for a company.-Facts:Lord Suirdale sued Brayhead Ltd for losses incurred after a failed takeover deal...

[1968] 1 QB 549

Apparent authority

Apparent authority (also called "ostensible authority") exists where the principal's words or conduct would lead a reasonable person in the third party's position to believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such a relationship. For example, where one person appoints a person to a position which carries with it agency-like powers, those who know of the appointment are entitled to assume that there is apparent authority to do the things ordinarily entrusted to one occupying such a position. If a principal creates the impression that an agent is authorized but there is no actual authority, third parties are protected so long as they have acted reasonably. This is sometimes termed "agency by estoppel

Estoppel

Estoppel in its broadest sense is a legal term referring to a series of legal and equitable doctrines that preclude "a person from denying or asserting anything to the contrary of that which has, in contemplation of law, been established as the truth, either by the acts of judicial or legislative...

" or the "doctrine of holding out", where the principal will be estopped from denying the grant of authority if third parties have changed their positions to their detriment in reliance on the representations made.

Rama Corporation Ltd v Proved Tin and General Investments Ltd [1952] 2 QB 147, Slade J, "Ostensible or apparent authority... is merely a form of estoppel, indeed, it has been termed agency by estoppel and you cannot call in aid an estoppel unless you have three ingredients: (i) a representation, (ii) reliance on the representation, and (iii) an alteration of your position resulting from such reliance."
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
The Raffaella or Egyptian International Foreign Trade Co v Soplex Wholesale Supplies Ltd and PS Refson & Co Ltd [1985] 2 Lloyd's Rep 36

Armagas Ltd v Mundogas Ltd or The Ocean Frost [1986] AC 717, an agent cannot clothe himself with ostensible authority simply by saying that he has authority
Hudson Bay Apparel Brands Llc v Umbro International Ltd [2010] EWCA Civ 949

Watteau v Fenwick

In the case of Watteau v Fenwick, Lord Coleridge CJ on the Queen's Bench concurred with an opinion by Wills J that a third party could hold personally liable a principal who he did know about when he sold cigars to an agent that was acting outside of its authority. Wills J held that "the principal is liable for all the acts of the agent which are within the authority usually confided to an agent of that character, notwithstanding limitations, as between the principal and the agent, put upon that authority." This decision is heavily criticised and doubted, though not entirely overruled in the UK. It is sometimes referred to as "usual authority" (though not in the sense used by Lord Denning MR in Hely-Hutchinson, where it is synonymous with "implied actual authority"). It has been explained as a form of apparent authority, or "inherent agency power".

Operation of law

China-Pacific SA v Food Corporation of India or The Winson [1982] AC 939

Ratification

Keighley, Maxsted & Co v Durant [1901] AC 240
Bolton Partners v Lambert (1889) 41 ChD 295

Disclosed agency

Montgomerie v United Kingdom Mutual Steamship Association [1891] 1 QB 370, Wright J
Irvine & Co v Watson & Sons (1880) 5 QBD 414, Bramwell LJ, settlement with the agent
Thomson v Davenport (1829) 9 B&C 78, merger and election
Debenham's Ltd v Perkins (1925) 13 LT 252
Lewis v Nicholson and Parker (1852) 18 QB 503, between agent and third party
Universal Steam Navigation Co Ltd v James McKelvie & Co [1923] AC 492
Bridges & Salmon Ltd v The Swan (Owner) or The Swan [1968] 1 Lloyd's Rep 5
N&J Vlassopulos Ltd v Ney Shipping Ltd or The Santa Carina [1977] 1 Lloyd's Rep 478, Lord Denning MR, oral contracts
Rayner v Grote (1846) 15 M&W 359
Yonge v Toynbee [1910] 1 KB 215

Undisclosed agency

Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199
Keighley, Maxsted & Co v Durant [1901] AC 240, Lord Lindley
Fred Drughorn Ltd v Rederiaktiebolaget Trans-Atlantic [1919] AC 203, exclusion of undisclosed principal by contract terms
Said v Butt [1920] 3 KB 497
Dyster v Randall & Sons [1926] Ch 932
Greer v Downs Supply Co [1927] 2 KB 28
Rolls-Royce Power Engineering plc v Ricardo Consulting Engineering Ltd [2003] EWHC 2871
Clarkson Booker Ltd v Andjel [1964] 2 QB 775
Cooke & Sons v Eshelby (1887) 12 App Cas 271
Armstrong v Stokes (1872) LR 7 QB 598, Blackburn J, settlement with the agent

Duties of agent

Chaudhry v Prabhakar [1989] 1 WLR 29, duty of care
Bristol and West Building Society v Mothew [1998] Ch 1, fiduciary duties
Henderson v Merrett Syndicates Ltd
Henderson v Merrett Syndicates Ltd
Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 was a landmark House of Lords case. It established the possibility of concurrent liability in both tort and contract.-Facts:...

[1995] 2 AC 145
Armstrong v Jackson [1917] 2 KB 822
Kelly v Cooper [1993] AC 205
Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339, duty to not accept bribes
Industries & General Mortgage Co Ltd v Lewis [1949] 2 All ER 573
Attorney General for Hong Kong v Reid [1994] 1 AC 324
De Bussche v Alt (1878) 8 ChD 286, duty to not delegate authority
Calico Printers' Association Ltd v Barclays Bank Ltd (1931) 145 LT 51

Rights of agent

Way v Latilla [1937] 3 All ER 759, contractual right to remuneration
Millar, Son & Co v Radford (1903) 19 TLR 575, work effective cause of services
Luxor (Eastbourne) Ltd v Cooper [1941] AC 108, opportunity for commission
Rhodes v Fielder, Jones and Harrison (1919) 89 LJKB 159, reimbursement and indemnity

Termination of agency

Campanari v Woodburn (1854) 15 CB 400
Frith v Frith [1906] AC 254
Lonsdale v Howard & Hallam Ltd [2007] UKHL 32, indemnity and compensation
Drew v Nunn (1879) 4 QBD 661