Business Law of Agency

3040 words (12 pages) Essay

6th Sep 2017 Law Reference this

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Purpose: People credited with this unit standard are able to: define agency; apply the law relating to creation and termination of agency; apply the law relating to authority of agents; apply the law as to the rights of third parties; and apply the law relating to the duties of a principal and an agent to each other, and the remedies for breach of duty.

Task:  1

(A)

a)Universal agency: In the case of universal agency the agent who deals with the third customer have the full authority and unrestricted authorities to act as like the principal. Because principal given that rights to the agent to do so. So in this case agent will see the business of Susan which is in overseas. (USLegal, NA)

b) General agency: General agency is bit similar to the universal agency in which agent take care of the principal property and look after and he have that much which principal could by himself. They can even get cash payments first instead of principal. In this case shop will cut the 30% of the total money in which they sell the silver. (GENERAL AGENT, NA)

Task 2

The main legal question is:

Was an agency relationship created between  Tim and  Gray?

The facts of the case:

Principal is Tim.  Agent is Gray. Third party is the car owner.

Tim who is an accountant loved old fashioned cars and he is keen to buy one. Tim tells to grey to visit a car show. In a car auction of Mercedes Benz. Grey offers $25000 for the car. That’s how Tim makes deal with Grey and Owner. Grey knew that Time would love to buy this.

The issue (s) is:

Are there ways of creating an agency relationship satisfied?  Yes.  There are five ways of creating an agency relationship.

  • Express appointment – appointed orally or in writing – the agent has express (or actual) authority.
  • Ratification – an agent acts without authority but the principal later ratifies (approves) the contract.
  • Necessity – operation of law in an emergency.
  • Apparent agency (also called estoppel or ostensible agency
  • Presumption (also called implied agency)

Decision and the reasons.

Example: Yes an agency relationship was created between Tim and Gray.  There are several ways of creating an agency relatlonship.  In this case the relationship was created by ratification when Tim ratified the deal.

The main legal question

Was the agency relationship between Michael and Livy terminated?

The facts of the case:

Principal is Michael.  Agent is Livy.  Third party is the tenant.

Michael has a house that was for lease.  His agent was Livey.  Michael made an offer for the renewal of the lease through Livy, his agent.  The tenant was given three months to accept the terms..  One week after making an offer Michael died.  After this the tenant signed the agreement, not knowing that Michael had died.

The issue (s) :

Are there ways of terminating an agency relationship?

Yes.  Agency relationship can be terminated by

  • both parties or by
  • operation of law

Decision and the reasons .

The agency was terminated by operation of law.  The law states that the agency relationship ends with the death of either party.  The death of Principal Michael terminated the agency relationship.  Since the third party (tenant) signed the contract after the death of the Principal (Michael) through the(  Agent ) Livy,  the contract between Michael and the tenant is void since Livy  was no longer Michael’s agent at the time of contract acceptance by the tenant.

Task 3

    3.1  

  1. Barlams has a binding contract with Eastexpo for the sale and   purchase of 800 sheepskins.

The main legal question is:

Who is bound in a contract with third party agent or the principal?

The facts of the case:

In this scenario : Principal: Kong, Agent: Wang and third party: Barlams

The fact of this case is that Kong hired a agent for his company to buy sheepskins from other companies. But they make a clause in the agreement that Wang can order only 500 sheepskins. He cannot order more than 500 without the permission of Kong. But here Wang visit Barlams and he founds the sheepskin quality is good so he order 800 of sheepskin with taking permission from Kong.

The issue (s) are:

According to the contract with Kong.  Wang is not allowed to ordered more than 500 sheepskins.

Decision and the reasons

Yes, Eastexpo can cancel the order of 800 sheepskins as they are not bound with any contract with Barlams. Their agent breaches the condition by ordering more that 800 sheepskins while he was not allowed to do that.

  1. Wang is liable as a result of his actions to either Barlam or Eastexpo.

The main legal question is :

Is any contract of  Barlam with Eastexpo?

The facts of the case:

Principal is Eastexpo. Agent is Wang. Third party is Barlams.The fact of this case is Wang order 800 sheepskins while he was not allowed to order more than 500 without permission but he did it without getting any permission from Kong.

The issue (s) are:

The issue is when he was in contract with Eastexpo that he cannot give order of more than 500 sheepskins then why he orders more than that to Barlams.

Decision and the  reasons

Yes, Wang is liable for all of this. Because he is in a contract with Eastexpo and the contract says that he can give order 500 of sheepskins but he cannot give order more than that.  So it’s clear that Wang is liable and he have to pay for this.

Task 4

     4.1  

The main legal question is

Is Reno has the rights to sue unnamed Principal?

The facts of the case:

Principal is unnamed. Park is Agent. Reno is third Party.

The fact of this case is that Reno wants a swimming pool at the back of her house. So she called Park and make a contract with him to make a swimming pool in a period of one month but she pay him $10,000 00 as an initial amount. There was also a clause in the contract which says if he fails to complete the swimming pool in one month then he have to refund the initial amount.

The issue (s) are:

The main issue is that as per contract the swimming pool should be complete in 1 month but he fails to do so. Now he has to refund the initial amount. But after 2 month Reno get to know that he was just an agent of Brilliant constructions. But he should tell this thing before making the contract.

Decision and the reasons

No. Reno cannot sue the unnamed principal because there is nothing about that unnamed principal in the contract. But she can definitely sue the Park  and get her money back as she makes a contract with him.

4.2

  Tanya sues James for not disclosing his relationship with Michael Hill Co.

The main legal question

Is Tanya able to sue Michel hill and James for did not disclosing the relation between them.

The facts of the case:

The fact of this case is Michael hill co was Principal, James was an agent and Tanya was a third party who wants to sell her diamond.

James was hired by Michael hill to buy a 9 cut diamond on a joint account for them on a certain price. James told Tanya that he will give her the diamond but she needs to wait for the sometime. James cancel the transaction with Tanya and Michael offers the diamond on lower cost.

The issue (s) are:

James tried to sell the diamond on higher price to Tanya instead of Michael hill. But first he made a false promise to Michael hill that he will give a diamond on a certain price.

Decision and the reasons  :

No, Tanya cannot sue the Michael hill and James. Because it is not necessary to disclose the information of Principal’s agent.

4.3

The main legal question is

Was Noreen authorized to deposited the half of the money in charities account without let them know?

The facts of the case:

Principal was Alan and Noreen was agent.

The fact of this case is Alan is rugby a team who play rugby games through their talent and all the fees which they get paid; Noreen transferred this whole amount into Alan’s account. Once they got NZ $50,000 from one of their major games and Noreen deposited only half of the amount into Alan’s account and rest of the money they give to the charity. Which Alan used to support while before.

The issue (s) are:

The issue is that Noreen donates the half of the amount without the permission of Alan. But she should ask them first. Whether they like to donate or not. Because they used to support the charity a while long before.

Decision and the reasons

Yes, the action taken by the Noreen will be considered as unauthorized.  Because without letting them know she  donated the money.

Task 5

5.1

1) The fact of this case is John was the Principal, Cathy was the agent and third party was Edwin.

John hired Cathy as an agent to sell his boat because he is going overseas and he tell her that he wants to sell this as soon as possible with a minimum cost of $150,000.  After this Cathy post an add to sell the boat. She got 20 buyer but she decided to talk only 5. Then she got one of the buyer who offered her 140,000 for the boat and 10,000 for her if she accept the offer.

2) The duties which Cathy breached are they she didn’t answered all of the calls. She answered only 5 calls. She should talk all of them. May she’ll get someone who can give her more than 150,000 and she also make a 10,000 commission by accepting the Edwin’s offer of 140,000.

3) John can cancel the contract with Cathy. Because he already told her the minimum amount of $150,000 and he can earn that commission profit by selling that boat himself.

5.2

The main legal question

Is there any violation of the law happened by the Principal.

The facts of the case:

The fact of this case John was the Principal, Bryan was agent and Linda was third parties. John hired Bryan to sell an article through auction. Bryan sell the article to the Linda through auction and after some time she found that the original article had been stolen and Greg who was the real owner will be able to sue the Bryan because he sell the stolen article to Linda.

The issue (s) are:

The main concern is john appoints the Bryan to sell the stolen article but that time Bryan was not aware with that. But when Greg sued Bryan then he gets to know that article was stolen. But now he can able to recover the money from John.

Decision and the reasons

Yes, we can say that there was violation of the duties by the John. Because the article was stolen. So it’s illegal to sell someone’s article.

5.3

  1. Assume that Jurgen is not liable to supply WDR. Explain what remedy WDR has, if any.

The main legal question

What remedy WDR has if Jorgen fails to supply?

The facts of the case:

In this case principal was Jurgen, Richard was agent and third party was WDR.

Jorgen used to make chocolate and used to sell these in Adelaide local market. But after some time he appoint a agent in Sydney to sell their chocolates in Sydney local market. Richard was his agent he starts to sell their chocolates in Sydney. Richard is succeeding to arrange wine and dine stores to sell chocolates to them. But in the month of march Jorgen get some stretch in resources for the manufacturing of chocolate so he tell his agent not to accept any large order for next 3 months.

The issue (s) are:

The issue is that Jorgen already told to Richard not to accept any big order from any customer. But still Richard accepts big orders from WDR and from one of his new customer with same big amount.  Richard also gets a plasma TV from WDR for the promoted delivery.

Decision and the reasons

No, Jorgen will not be liable to supply the orders to WDR and new Customers. Richard will be liable for that. Because he takes order by himself while he knew that Jorgen told him not to accept any big orders for next 3 month. In this case WDR can sue Richard and claim all of their loss from Richard.

WDR can sue Richard for not delivering the chocolates.

Able to claim all their loss from Richard

Can terminate the contract.

  1. Assume that Jurgen is liable to supply WDR. Explain what remedy Jurgen has, if any.

The main legal question is

What remedy Jorgen has if he liable to supply.

The facts of the case:

In this case principal was Jorgen, Richard was agent and third party was WDR.

Jorgen used to make chocolate and used to sell these in Adelaide local market. But after some time he appoint a agent in Sydney to sell their chocolates in Sydney local market. Richard was his agent he starts to sell their chocolates in Sydney. Richard is succeeding to arrange wine and dine stores to sell chocolates to them. But in the month of march Jorgen get some stretch in resources for the manufacturing of chocolate so he tell his agent not to accept any large order for next 3 months.

The issue (s) are:

The issue is that Jorgen already told to Richard not to accept any big order from any customer. But still Richard accepts big orders from WDR and from one of his new customer with same big amount.  Richard also gets a plasma TV from WDR for the promoted delivery.

Decision and the reasons

Okay, Yes If Jorgen will be liable for the supply of chocolates to WDR. Then remedies which he will get is like he can claim for that Plasma TV which Richard gets from WDR also he can cancel the contract with Richard and also he can say no to Richard for his commission. Because Richard should not accept the order after gets written letter from Jorgen.

5.4   Discuss the remedies for breach of agent’s duties are applied to a given fact situation.

Justify your answer. (E5-PC 5.4)

Facts

The office manager tells his secretary that she can buy a television for the office lunch room but she must not go over $500. The secretary buys a microwave for $750, telling the store it is for her work and to invoice them. When the invoice comes the office manager refuses to pay. What rights does the store have?

The main legal question is

Remedies after breaching the agent’s duties.

The facts of the case:

In this case Principal was Manager, Secretary was the agent and third party was store.

The case is that Manager told secretary to buy a television for the lunch room. But it should not be more than $500. But instead of television secretary buys a microwave for $750 and she ask for the invoice to the store as for her work.

The issue (s) are:

The issue is that secretary breach the order of his manager and also the amount which she told to spend minimum. She buy a microwave instead of TV. When manager gets to know she refuses to pay her.

Decision and the reasons

The remedies should be like that:

She has to pay for this by herself or if she refuse to pay then her Manager may deduct this from her salary.

                                             References

Contractual Remedies Act 1979. (2016). Retrieved from http://www.legislation.govt.nz/act/public/1979/0011/latest/DLM366.html

Declaratory relief law and legal definition. (2001-2016). Retrieved from http://definitions.uslegal.com/d/declaratory-relief/

Chron. (2016). Retrieved from http://www.smallbusiness.choron.com

InvestorWords. (2016). Retrieved from http:/investorwords.com

your dictionary. (1996-2016). Retrieved from http://www.yourdictionary.com

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