Commercial Law: Disclosed + Undisclosed Agency

Front 1

Montgomerie v UK Mutual Steamship Association

Back 1

GR: only person who may sue in disclosed agency contt is P, only person who may be sued is P provided
: A acts within actual authority
: A exceeds authority, but P ratifies
:A exceeds authority, but apparent authority exists (P may be sued)
:A exceeds authority but apparent authority exists (P may only sue 3P if he ratifies A's act)

Hint 1

GR of P+3P rship

Front 2

Settlement in disclosed agency

Back 2

GR: payment by 3P to A does not discharge debt to P

Exceptions
: A had actual authority to receive payment in behalf of P (must be via specifically authorised method)
:P estopped from denying right of 3P to pay A because P rep that payment to A would discharge debt
: method of payment ratified by P

Front 3

Irvine & Co v Watson & Sons

Back 3

W&S employed A to purchase oil from I&C
A did, on terms "cash on /before delivery", disclosed but unidentified P
I&C delivered to A without accepting payment
W&S in good faith, not knowing I&C x been paid, paid A
A x pay I&C

Hint 3

Whether payment by P to A discharged lty to 3P: "impossible to say it discharged them"_unless P were misled by 3P's conduct into believing A had already settled with 3P

Front 4

Def argument in Irvine & Co v Watson & Sons

Back 4

3P did mislead P into believing A had settled payment to 3P by delivering oil to A on "cash on/before delivery" terms
hence P had right to suppose that 3P would not have delivered unless payment received

Hint 4

argument rejected: 3P had right to part with goods without strictly insisting on payment
nothing to justify P's mistaken belief that they would so insist (eg custom)

Front 5

Heald v Kenworthy

Back 5

no authority to say payment by P to A precludes 3P from recovering from P
unless it appears that 3P induced P to believe settlement has been made with A

Front 6

Wyatt v Marquis of Hertford

Back 6

3P gave receipt to A but A had not made payment
on this basis P reimbursed A, who did not pay 3P

Hint 6

held: debt owed by P to 3P discharged, receipt issued by 3P induced P to believe A had settled with 3P

Front 7

Lloyd v Grace, Smith & Co

Back 7

where A makes misrep, P is liable if A was acting within actual/ apparent authority OR P ratified
no req that P should be aware of A's action

Front 8

Armstrong v Strain

Back 8

there is no fraudulent miseep if A honestly believes stt to be true and P in knowledge of the truth did not know A would make the stt

Front 9

does A come within MA 1967?

Back 9

no, not liable to 3P for misrep
unless it amounts to deceit/ neg (Hedley Byrne v Heller)

Front 10

A's lty to 3P on the contt

Back 10

GR in montgomerie is that only P liable
but this does not preclude A from being personally liable in addition to P
onus of proof is on party alleging A is personally liable

Hint 10

whether A+P liable depends on intention derived from
: nature of contt
: terms
: surrounding circ
Objectively examined (Bridges &Salmon v The Swan)

Front 11

Signing contt in own name without any qualification or title

Back 11

GR: they assume personality unless clear in contt that signatory signed in capacity of an A

Hint 11

affixing label "Agent / director" insufficient to displace presumption that signatory was signing on own behalf
must be clear that he was acting in representative capacity

Front 12

Universal Steam Navigation v James McKelvie & Co

Back 12

signing "as agents" indicated clearly no intention if being personally bound as Ps
"I can imagine no other purpose"

Hint 12

Sumner: purpose = purport to limit lty, no merely to identify a person
rejected argument that "agents" is a mere description, not ordinarily used to describe a trade eg tailor/butcher

Front 13

Bridges & Salmon v The Swan, on Universal Steam v James McKelvie

Back 13

obiter: if only "agent" added as supposed to "as agents", is it sufficient to displace presumption that they were signing on own behalf + avoid being bound as a P?

Hint 13

unclear if would amount to mere description or suff to limit lty

Front 14

Bridges & Salmon v The Swan

Back 14

Brandon J: Pl's conduct showed they understood clearly bills to be sent to JDR Ltd, not Mr R
BUT possible for a person to give credit to a P without at the same time giving exclusive credit to him

Hint 14

: applied objective intention test by exam surrounding circ
: Mr R all times owner of The Swan
: Pl knew he was owner
: Mr R had personal interest in The Swan in addition to directorial interest
: effect of boat repairs= preserve + improve his own prop
: Mr R x make clear to PL that he was disowning any personal lty

BORDERLINE CASE

Front 15

Merger + election, disclosed agency

Back 15

if 3P sues A before P is disclosed, election x apply (not full knowledge) but merger may apply: 3P cannot later sue P

Hint 15

justifications: no double compensation

Front 16

breach of warranty of authority, disclosed agency

Back 16

A acting w/o actual/ apparent authority, does not act as P, P x ratify: neither will be liable on "the contract"
BUT A has impliedly contracted that authority exists, hence is liable if 3P is induced by A's reps of authority

Front 17

Yonge v Toynbee

Back 17

solicitors liable for cost of proceedings when acted for client who became insane, even though they were unaware of the fact
illness terminated their authority to act

Hint 17

lty for breach of warranty of authority is strict: no defence to show that misrep was dues to honest but mistaken belief about existence/ extent of authority
applies even if A had no means of knowing authority had ended

Front 18

Undisclosed agency

Back 18

no req for agency to be disclosed
contt btw A + 3P, UP may intervene
GR: UP can sue/ be sued on contt made on his behalf by A acting within actual authority

Front 19

criticism of undisclosed agency

Back 19

anamolous, gives P rights+ lty to contt which he was not originally privy to
Frederick Pollock: inconsistent with elementary doctrines of law of contt

Hint 19

UP doc developed before theories of contt law on consent
makes no sense to say SUP is anamolous when measure by contt principles than it is to say that Doc of privity is anamolous because it is inconsistent with DUP

Front 20

Requirements of disclosed agency
Siu Yin Kwan v Eastern Insurance

Back 20

1. UP may sue/ be sued on contt made by his A within actual authority
2. A must intent to act on P's behalf
3. A may also sue/ be sued
4. Any defence 3P has against A is available against his UP
5. Terms of contt may exclude P's right to sue/ lty to be sued: contt itself/ surrounding circ may show A is the true and only P

Front 21

Excluding the Doc of undisclosed agency

Back 21

DUP not apply where
: A acts w/o authority. ratification not possible because P not identified to 3P at time of A's act (Req1)

:terms of contt exclude P's right to intervene (Req5)

:A x intend to act as agent (Req 2)

:3P makes clear they wish to contt only with A and no one else (Req5)

: P + A agree A will not contt on P's behalf in certain transactions, but as a P (Req5, Req2)

Front 22

Humble v Hunter

Back 22

son chartered out mother's vessel, signed charter party as "owner"
Mother could not intervene as UP, description as "owner" = inconsistent with possibility of agency

Hint 22

terms of contt may exclude UP's right to intervene

Front 23

Fred Drughorn v Rederiaktiebolaget Trans-Atlantic

Back 23

A signed as "charterers"
UP claimed entitlement to sue
Held: evidence admissible to eat that A had contracted on behalf of P, hence P could sue
"charterer" different from "owner", commonsense should be able to contt on behalf of P

Hint 23

limits effect of Humble v Hunter, perhaps to extent of overruling

Front 24

Criticism of Fred Drughorn

Back 24

should not have been construed as case of UP, but as disclosed but unidentified P, "charterer" suff do disclose existence of agency
samecresult could be achieved w/o applying DUP

Hint 24

nevertheless, shows courts more likely than not to construe contt to allow UP to intervene
if not, risk destroying beneficial commercial assumption

Front 25

Said v Butt

Back 25

Hint 25

where 3P makes clear they wish to contt with A and no one else

Front 26

Duster v Randall & Sons

Back 26

Hint 26

where 3P makes clear they wish to contt with A and no one else

Front 27

Siu Yin Kwan v Eastern Insurance

Back 27

PC argued not case of UP
: insurers knew R were only shipping agents, not owners of Osprey
: R not owners of Osprey
: insurers dealt with R previously
but could not overrule facts

Hint 27

held: Owners (Axelson) could intervene as UP, relatives entitled to recover against insurers
although insurance contt = non-assignable, did not prevent intervention as identity not material to risk

Front 28

Lord Lloyd, Siu Yin Kwan

Back 28

"if courts too ready to construe contt as contradicting rights of UP to intervene, it will go far to destroy the beneficial assumption in commercial cases"

Hint 28

written contt cannot be taken as gospel truth: commercial truths prevail

Front 29

Teheran-Europe Co v Belton Tractors

Back 29

beneficial assumption: in commercial srttomg, parties are willing to contt with anybody

Hint 29

only exceptional cases where UP intervention seen inconsistent with term of contt

Front 30

does exclusion of DUP by req 5 still turn on intention of 3P to deal with A and only A?

Back 30

appears not: commercial presumptions take precedence.
Said v Butt wrongly decided?
: ticket is not non-assignable
: no express terms to exclude P's intervention
: judgement based on erroneous premise that contt was btw 3P + P (should be 3P + A, UP intervene)
: allowing personality to prevent UP intervention if it is "material ingredient" of contt= heaping anomaly upon anomaly

Front 31

justifications in said v butt

Back 31

fair dealing, UP should not be allowed to intervene
may be area where good faith may provide reasoning

Hint 31

avoiding the Butt Problem: show that person 3P dealt with was acting as P, not A

Front 32

Nash v Dix

Back 32

Def x want to sell chapel to committee of Roman Catholics
sold to Pl, later refused to complete transaction when discovered Pl intended to resell to committee

Hint 32

spec perf ordered, Pl was not an A, acting as P with view to resell at profit
Butt Problem avoides

Front 33

Archer v Stone

Back 33

3P asked A if he was acting for specific P, A denied

Hint 33

Held: P could not enforce against 3P

Front 34

undisclosed agency: settlement by UP to A

Back 34

Hint 34

Heald v kenworthy, disclosed agency: payment by P to A does not preclude 3P from recovering from P (unless inducement)

Front 35

undisclosed agency; merger + election

Back 35

if 3P brings action against A w/o knowing of existence of UP = made choice w/o full knowledge of the facts, election cannot apply

Front 36

Claekson Booker v Andjel

Back 36

Pl discovered UP, brought action, filed writ in court
discovered UP winding up, decided to sue A instead
not estopped from withdrawing to sue A instead, acted immediately
cut off point is question of fact
delay defeats equity

Hint 36

3P can elect to sue UP instead of A/ vice versa once he discovers all material facts, what is the cut off point?