Case Law: Agency

• School teacher asked taxi driver to cash cheques, taxi driver had previously carried out tasks and was not expecting payment. After cashing the cheques taxi driver lost the teachers money no question of dishonesty. Teacher sued for negligence and taxi said he was acting on unpaid basis.

  Held that taxi driver was liable as he owed duty of care as a mandate.


  Mandate: Copland v Brogan 1916
• Capacity: Tinnevelly Sugar v Mirrlees, Watson and Yaryan 1894

  D&B claim to be acting as agent for Tinnevelly, they entered contract with Mirrlees but Tinnevelly did not exists at the time the contract was entered. Machine later broke and Tinnevelly sued Mirrlees for breach of contract.

  Held that Tinnevelly was not a party to the contract with Mirrlees because D&B couldn’t act as agents for a principle that did not exist so Mirrlees was not liable.
• Agency creation by holding out: Hayman v American Cotton Oil 1907

  American advertised that M was their agent by sending letters to customers. FSS bought goods from M and paid before delivery. M becomes insolvent and creditors attempt to claim goods from American but American denied that M was ever their agent.

  Held that by American placing advertisements it had given third parties impression M was agent and so American was liable
• Agency by ratification: Kelner v Baxter 1866

  K sold wine to B who claimed to be agent for company that hadn’t been registered yet. Wine was consumed by no payment was made

  It was held that B was personally liable to K for payment since a principle who didn’t exists at the time the contract was made cannot later ratify it.
• Agency by necessity: Couturier v Hastie 1856

  Cargo ship begins to rot so captain lands at nearest port and sells cargo to prevent it from being written off, cargo owner sues captain for full price.

  Held that captain was acting as agent of necessity in an emergency to prevent further loss.
• Actual authority: Ireland v Livingston 1872

  Principle contracts to buy 500 tonnes of sugar, sgent ships 400 tonnes and fully intends to ship remaining goods, but principle refuses to accept delivery.

  Held that agent carried out princpals orders in good faith and had acted within express actual authority so principal was bound to accept delivery.
• Implied authority: Hely-Hutchinson v Brayhead 1968

  Chariman and chief executive acts as companies managing director even though he has never been officially appointed, he entered variety of transactions and company refused to fulfil.

  Held that he acquired implied authority from position of chief executive to enter contracts and thus the company was bound to fulfil contracts.
• Ostendible authority: F&L V Buckhurst Properties

  Directors allowed member of B to act as managing director even though no official appointment, director enters various contracts one which was a firm of architects.

  Held that director did not have actual authority to enter these contracts however he was acting within his ostensible authority and the architects had good reason he did hold the authority to bind the company.
• Disclosed principle: Santa Carina 1977

  Defenders are known agents for unnamed principle, persurers supplied ship bunkers to defenders but they were never paid for. Persurers sued defenders for breach but defenders claimed they were acting as agents the the persurers were aware of that.

  Held that principal was disclosed principal so persurers should have sued the principle not the agents
• Undisclosed principle: Stewart v Shannessy 1900

  Shan acted as agent for company and employed Stew but did not make it clear she was an agent, she later dismissed Stew and he sued for arrears of pay.

  Held that Shan was personally liable to Stew as she gave no indication she was an agent for a company.
• Duty to obey: Gilmour v Clark 1853

  Principle instructs goods to be put on specific boat, but agent puts them on another one and the boat sinks.

  Held that agent is required to compensate principle for not obeying his instructions
• Act in person: Black v Cornelius 1879

  C employed an architect D and then D hired B as a surveyor to make some measurements. The buildings were never built, B claimed payment from C but C refused to pay on the grounds he did not give D authority to hire B.

  Held that there’s a well-established custom amongst architects and they are permitted to use the services of a surveyor and so C is liable to pay B.
• Keep proper accounts: Tyler v Logan 1904

  L is manager of shoe shop in Dundee. At stock take a shortfall of £62 is discovered, L is not suspected of dishonestly buy owner sues him for not keeper proper accounts.

  Held that L is liable to pay owner
• Conflict of interest: Mcphersons trustees v Watt 1877

  W is solicitor for trustees and was instructed to sell 4 houses. He arranged to sell them to his brother who agreed to sell 2 of them back to him for half the price. Trustees found out before transaction took place and sued

  Held that contract between W and brother was cancelled
• Secret profits: Attorney general for hong kong v reid 1994

  R was director for public prosecutions in hong kong and was found to be taking bribes

  It was held that R was agent of British crown and was not permitted to make secret profits, crown were therefore entitled to recover these sums
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  Right to receive payments: Dudley v Barnet 1937

  Agent had task to find suitable tenant for principles property , agents recomneds but principle refuse and takes third parties offer. He refuses to pay agent on basis he did not benefit from advice, agent sued

  Held that principle is liable to pay agent for services
• Right to be indemnified: Stevenson v Duncan 1842

  Principle refuses to honour contract negotiated on his behalf, third party sues agent for damages and agent sues principle.

  Held that agent has right to be indemnified for losses he experienced
• Right of lien: Sibbald v Gibson 1852

  S engages G as agent to sell corn, dispute over commission due. S transfers corn to G to be sold and G holds ome back to cover his commission.

  Held that agents are within their right to withhold property over commission not received.
• Death of a principle: Campbell v Anderson 1829

  Agent believed principle to be alive when he negotiated contract

  Held that the principles estate was bound to honour the agreement with third party and agent was not personally liable
• Termination due to impossibility: Stevenson v AG 1918

  S was in partnership with german company as sole agent to sell companies goods.

  Held by the court that agency relationship involved trading with enemy aliens in wartime and the partnership was dissolved on ground of illegality.