Agency Law

CRASH COURSE
ACCA PAPER F4

Corporate and
Business Law
(Eng. variant)
June 2014 session

Sir MAK

Agent
An agent is a person who is empowered to represent another person, called the principal, and
to bring the principal into a legal relationship with a third party. As a general rule, there are
no formal requirements for the appointment of an agent, and anyone, even a minor, can
validly be an agent

Formation of agency
Express agreement
This is where P actually appoints A to be his agent, whether orally or in writing.
Implied agreement
Where the parties have not expressly agreed to become principal and agent, it may be
possible to find an implied agreement based on their conduct or relationship.
Necessity 4 conditions:

P's property entrusted to A Great Northern Railway v Swaffield.

emergency arises making it necessary for A to act
in P's interests
not possible to communicate with P

Ratification The effect of ratification is to backdate As authority to act as agent.

6 conditions:
A purports to act as agent for a P who is named or otherwise identified
P has capacity and exists both at the date the contract is made and at the date of
ratification
P has been fully informed of the terms of the contract (or is prepared to ratify in any
event).
P ratifies the whole contract.
P ratifies within a reasonable time.
P clearly signifies his intention to ratify to TP. A void or illegal contract cannot be ratified
because it is of no legal effect from its inception.

Your Notes;

Estoppel
Arises where P makes a representation to the third party that A is his agent, even though he
is not. P is then estopped from denying this representation
Authority of the agent
Actual authority Actual authority is that which the principal has given to the agent and may
be express or implied.
Express authority is that which the principal has explicitly given to his agent.
An agent has implied authority to do those things:
(a) which are reasonably incidental to the performance of an express authority, or
(b) which an agent occupying the position or office would usually have authority to do.
Note: an agent cannot have implied authority to do things which have been expressly
prohibited by the principal.
Apparent authority
This is where the agent does not actually have authority. Apparent authority is that which the
principal has represented to the third party, by words or by conduct, that the agent has.

Your Notes;

Dec. 11
Explain the meaning of the following terms with regard to the law of agency, providing specific
examples within the context of company law:
(a) express authority;
(3 marks)
(b) implied authority;
(3 marks)
(c) ostensible/apparent authority
(4 marks)
(10 marks)

For part (a)

Keep in mind its worth 3 marks

Step 1: Plan your answer roughly

_____________________
_____________________
_____________________

Step 2: Now start writing in details

1st stroke:

______________________________________________________________________

2nd stroke:

______________________________________________________________________

3rd stroke:

______________________________________________________________________

For part (b)

Keep in mind its worth 3 marks

Step 1: Plan your answer roughly

_____________________
_____________________
_____________________

Step 2: Now start writing in details

1st stroke:

______________________________________________________________________

2nd stroke:

______________________________________________________________________

3rd stroke:

______________________________________________________________________

For part (b)

Keep in mind its worth 4 marks

Step 1: Plan your answer roughly

_____________________
_____________________
_____________________

Step 2: Now start writing in details

1st stroke:

______________________________________________________________________

2nd stroke:

______________________________________________________________________

3rd stroke:

______________________________________________________________________

4th stroke:

______________________________________________________________________