Law of Agency PDF

THE LAW OF AGENCY 11.3 AN AGENT’S AUTHORITY  AN AGENT’S AUTHORITY What distinguishes an agent from other types of employee or contractor is that an agent has the authority to represent the principal and bind the principal in legal matters. An agent’s authority can arise in diff...

THE LAW OF AGENCY 11.3 AN AGENT’S AUTHORITY  AN AGENT’S AUTHORITY What distinguishes an agent from other types of employee or contractor is that an agent has the authority to represent the principal and bind the principal in legal matters. An agent’s authority can arise in different ways but, once created, it has the same effect. The different possibilities are: Express authority Implied authority Apparent (ostensible) authority  EXPRESS GRANTS OF AUTHORITY (A TYPE OF ‘ACTUAL AUTHORITY’) A principal may expressly authorise the agent to act on the principal’s behalf. Express authority can be general (i.e. authority to represent the principal in any legal matter) or specific (i.e. authority to represent the principal only in specified matters). Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd 2 QB 480 Express authorisation can normally be given orally or in writing, but in some circumstances, such as when appointing an agent to buy or sell land for the principal, the authority must be given in writing.  IMPLIED AUTHORITY (ANOTHER TYPE OF ‘ACTUAL AUTHORITY’) A person appointed as an agent with specified express authority may, by implication, have additional authority to act for the principal: To do anything normally or necessarily incidental to the authorised acts To do anything that a person so employed would normally have authority to do To do something that, by custom, the agent would have the authority to do. - Australia & New Zealand Bank Ltd v Ateliers de Constructions Electriques de Charleroi 1 NSWR 19; 1 AC 86  APPARENT/OSTENSIBLE AUTHORITY Even when a person is not given any actual authority (express or implied) to represent their employer as an agent, but they nevertheless do something on behalf of their employer, it is possible that the employer will be legally bound because they have placed the employee is a situation where it appears to third parties that the employee has authority to represent their employer as an agent. Because this authority arises from the appearances created by the principal, and relied on by the third party, it is referred to as apparent authority, but its effect is the same as actual authority. - Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd 2 QB 480; 1 All ER 630