KRG Chapter 10
AGENCY
ᴥ Often referred to as representation
ᴥ Companies often use agents, curators (mentally incapacitated), guardians
(infants)
3 GOLDEN RULES OF AGENCY
1. Tripartite relationship = always more than 2 parties; minimum 3
2. Agent must!
a. Have authority of P to act of his behalf
b. Act within scope of authority
3. Only P & T (third party)
i. Acquire rights and duties
ii. Even though contract concluded by A &T
iii. The agent receives nothing
BASIC CONCEPTS
֎ Agency refers to the legal situation
֎ Agent lawfully authorised to act
֎ On behalf of the other (principal)
֎ Causing the P to acquire all rights & duties flowing from such a legal
act
Act of agency -> juristic act that agent performs on behalf of principal
ᴥ Agent needs the necessary authority!
NB
REQUIREMENTS FOR A VALID ACT OF AGENCY:
1. Peter (principal) grants Andrew (agent) to buy a car from a Ruben (third
party)
2. Andrew concludes a contract on sale on behalf of Peter
3. Which requirements must be met?
i. Valid contract of sale
ii. Normal requirement for contractual requirement for
contractual liability provided
iii. Andrew must have necessary authority & act in ambit of
authority
ﻬIf peter wants a Toyota but Andrew purchases a
Suzuki
, ﻬCONTRACT IS INVALID!!!
ᴥ ACTS SUSCEPTIBLE TO AGENCY – Cannot be concluded by an agent
ֻ The act may be such a personal nature
Material importance
Agency is not possible
ֻ Legislation compels a person to act personally (statutory rule)
Marriage by proxy is prohibited
Marriage Act
The concept of authority is central to law of agency!
ᴥ if doesn’t have authority
ᴥ Incur personal liability from
agency
NB QUESTIONS THAT MUST BE ASKED!
ֻ Does the agency have authority, what was the source of
authority?
ֻ What was the scope of authority?
SOURCES OF AUTHORITY
= to ensure principal and third party are liable and entitled under contract
= agent must have the necessary authority preform juristic act – look at the
source
1. A contract
o Between agent and principal (expressly or tacitly)
Authority can be done expressly or tacitly
POA = person gives authority to attorney to act on
matters
o Exception is applicable here!
o Formality
o Principal make offer to agent – perform juristic act
o Can be found in the form of a MANDATE
p (mandator) instructs a
(mandatary)
to do something on his behalf
AGENCY
ᴥ Often referred to as representation
ᴥ Companies often use agents, curators (mentally incapacitated), guardians
(infants)
3 GOLDEN RULES OF AGENCY
1. Tripartite relationship = always more than 2 parties; minimum 3
2. Agent must!
a. Have authority of P to act of his behalf
b. Act within scope of authority
3. Only P & T (third party)
i. Acquire rights and duties
ii. Even though contract concluded by A &T
iii. The agent receives nothing
BASIC CONCEPTS
֎ Agency refers to the legal situation
֎ Agent lawfully authorised to act
֎ On behalf of the other (principal)
֎ Causing the P to acquire all rights & duties flowing from such a legal
act
Act of agency -> juristic act that agent performs on behalf of principal
ᴥ Agent needs the necessary authority!
NB
REQUIREMENTS FOR A VALID ACT OF AGENCY:
1. Peter (principal) grants Andrew (agent) to buy a car from a Ruben (third
party)
2. Andrew concludes a contract on sale on behalf of Peter
3. Which requirements must be met?
i. Valid contract of sale
ii. Normal requirement for contractual requirement for
contractual liability provided
iii. Andrew must have necessary authority & act in ambit of
authority
ﻬIf peter wants a Toyota but Andrew purchases a
Suzuki
, ﻬCONTRACT IS INVALID!!!
ᴥ ACTS SUSCEPTIBLE TO AGENCY – Cannot be concluded by an agent
ֻ The act may be such a personal nature
Material importance
Agency is not possible
ֻ Legislation compels a person to act personally (statutory rule)
Marriage by proxy is prohibited
Marriage Act
The concept of authority is central to law of agency!
ᴥ if doesn’t have authority
ᴥ Incur personal liability from
agency
NB QUESTIONS THAT MUST BE ASKED!
ֻ Does the agency have authority, what was the source of
authority?
ֻ What was the scope of authority?
SOURCES OF AUTHORITY
= to ensure principal and third party are liable and entitled under contract
= agent must have the necessary authority preform juristic act – look at the
source
1. A contract
o Between agent and principal (expressly or tacitly)
Authority can be done expressly or tacitly
POA = person gives authority to attorney to act on
matters
o Exception is applicable here!
o Formality
o Principal make offer to agent – perform juristic act
o Can be found in the form of a MANDATE
p (mandator) instructs a
(mandatary)
to do something on his behalf
