Commercial debate Essay Example | Topics and Well Written Essays - 1000 words

Commercial debate - Essay Example In such a case, the agent himself will be held to be liable to the third party for a breach of an implied representation of authority. Moreover, a breach of such a kind would exempt the agent from claiming any reimbursements of expenses incurred in the line of duty or his own service associated charges. Where an agent purports to act in a way not expressly stated by the principle, his duties are considered in light of any implied authority awarded by the principle. Hence, an agent who engages in a contract for the supply of goods for the principle will be impliedly allowed to sign documents of payment and title for the principle (Rosenbaum v Belson (1900) 2 Ch 267). However, the concept of implied actual authority is applied cautiously by the courts in interpreting agreements and the act done by the agent must truly be incidental to his tasks. Thus, factors such as the course of dealings which are widely accepted in the line of business between the agent and principle (Nickalls v Mer ry (1875) LR 7 HL 802)), his occupation and profession, and the test of usual authority all apply to the determination of the agent’s scope of authority. However, there are cases where the extent of the authority of the agent is overridden by the third party’s reliance on his representation. The presence of this ostensible authority is what is essentially made available to the third party, as in practice the third party would rarely ever get to see the terms of the actual contract between agent and principle. Thus, given that he relies on the apparent authority of the agent (which includes knowledge of the agency, knowledge of the presence of a principle, and reliance on the representation of the principle (see The Tatra (1990)), the agency will operate by virtue of the Equity principle of estoppel, enabling the principle to be bound to the third party even if the agent acts outside the authority awarded to him by contract so long as the agent acted within the authorit y represented by the principle to the third party. This has the ability to negate the consent of the principle as the agent may very well be acting outside the authority granted to him by express or implied actual authority, and exists solely in favor of the third party (Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd (1964)) who has altered his position in reliance on the representation of the agent. Equity in this case creates an agency by estoppel binding the principle to the contract with the third party. Thus, it follows that to establish apparent authority all which is required is a representation by the principle of appointing the agent as his representative agent and the third party to rely on that representation to his detriment. No further allusion is required by the principle, so much so that the representation may even be made by silence (Spiro v Lintern (1973)), along with the third party knowing or possessing some knowledge of his capacity as agent of the principle. This is one case where the agency is created without strict adherence to the consideration of the actual extent of the aut