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LAW OF AGENCY

LAW OF AGENCY. What is agency?. …When one person, with the necessary authority to do so, conducts a juristic act for and on behalf of another in such a manner that he obtains rights and obligations for the other person without him acquiring any rights or becoming accountable

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LAW OF AGENCY

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  1. LAW OF AGENCY

  2. What is agency? • …When one person, with the necessary authority to do so, conducts a juristic act for and on behalf of another in such a manner that he obtains rights and obligations for the other person without him acquiring any rights or becoming accountable • Fouché (2007) pg 244

  3. What is agency then? • One person acts on behalf of another • The act is a juristic act • The act is authorised • The action results in a legal tie between two people, one of which was not involved in the original action

  4. How does agency arise? • By agreement • By operation of law • Through estoppel • By ratification

  5. Authority by Agreement • By agreement Principal gives Agent authority to act on his behalf • No formalities required • Can be by way of written Power of Attorney

  6. Authority by Operation of Law • Where one party in absence of agreement has authority by law to represent another • Eg: • Guardian representing a minor • Curator acting for mentally insane • Partner representing a partnership or other partners

  7. Authority through Estoppel • Where a person creates the false impression that another person may act on his behalf and a third party acts on the strength of that (mis)representation, the “principal” can be bound by the false impression he created.

  8. Authority by Ratification • Where the “principal” gives his consent or authority after the representation has taken place

  9. The Effects of Representation • The legal bond will exist between the principal and the third party. • The agent does not acquire any rights or duties

  10. Specific types of Agents • Auctioneers • Del Credere Agents • Brokers • Estate Agents • Insurance Agents

  11. Duties of the Agent • To perform in accordance with the principal’s instructions • Act honestly and in good faith • Display care, skill & diligence • Account to the principal

  12. Duties of the Principal • To pay the agreed remuneration • To account • To reimburse the agent for all expenses necessarily incurred by him • To indemnify the agent for all losses or liabilities incurred in performing the authorised act

  13. The Doctrine of the Undisclosed Principal • Where the agent acts on behalf of a pricipal without disclosing the fact. • Requirements • Agent must be authorised to act for principal • Agent must have intended to contract on behalf of principal • Agent must fail to disclose agency at all • Third party can sue principal or agent but not both

  14. Liability of the Agent • Principal (not agent) liable if agent guilty of misrepresentation or duress • Agent liable if he acts outside of his authority • Agent liable for any guarantees he has given (eg: that the principal will pay etc…)

  15. Termination of Agency • On fulfilment of the mandate • By expiry of agreed time period • Supervening impossibility of performance • Death of the agent or principal • By agreement

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