LAW OF AGENCY

BACHELOR OF ACCOUNTANCYLAW 385

COMMERCIAL LAW

LAW OF AGENCY• Governed by Part X of the Contracts Act 1950.• s.135 of the Contracts Act 1950 : An "agent" is a person

employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the "principal".

• Agency - relationship which subsists between a principal & an agent, where the agent has been authorized to act for the principal or represent him in dealing with others / 3rd party.

• Agent - A person who is employed by the principal to do an act on behalf of the principal or to represent the principal in dealings with the 3'd party

• Principal - A person who authorizes the agent to act on his behalf

LAW OF AGENCY

TYPES OF CONTRACT

CREATED IN AN AGENCY

CONTRACTUAL RELATIONSHIP

BETWEEN PRINCIPAL AND AGENT WHERE THE AGENT DERIVES

AUTHORITY

CONTRACTUAL RELATIONSHIP

BETWEEN PRINCIPAL AND THIRD PARTY TO WHOM THE AGENT

DEALS WITH

CAPACITY

CAPACITY OF PARTIES IN AN

AGENCY

PRINCIPAL: S.136 – AGE OF MAJORITY &

SOUND MIND

AGENT: S.137 – ANYONE CAN BE AN

AGENT BUT THE PRINCIPAL HOLDS RESPONSIBILITY

CHAN YIN TEE V WILLIAM JACKS & CO

(MALAYA) LTD

FORMATIONBy express

appointment

By implied appointment

By ratificationBy necessity

By the doctrine of estoppel or holding

out

AGENCY BY EXPRESS APPOINTMENT

• Section 140 Contracts Act 1950:“An authority is said to be express when it is given by

words spoken or written. An authority is said to be implied when it is to be implied from the circumstances

of the case, and things spoken or written, or in the ordinary course of dealing, may be accounted

circumstances of the case.”

AGENCY BY IMPLIED APPOINTMENT

IMPLIED AGENCY

IMPLIED FROM CIRCUMSTANCES OF THE

CASE BY WORDS OR CONDUCT S.140 (Chan Yin Tee V William Jacks)

IMPLIED FROM THE RELATIONSHIP OF

HUSBAND AND WIFE - REBUTTABLE

IMPLIED BY S.7 OF THE

PARTNERSHIP ACT 1961

AGENCY BY RATIFICATION

CERTIFICATION OR ACCEPTANCE OF

AN ACT DONE WITHOUT

AUTHORITY

HOW? AGENT EXCEEDS OR HAS NO AUTHORITY

PRINCIPAL CAN CHOOSE TO REJECT OR

ACCEPT S.149

CAN EXPRESS OR IMPLIED S.150

EFFECT: PRINCIPAL IS BOUND RETROSPECTIVELY FROM THE DATE

OF THE ACT BY AGENT AND NOT THE DATE OF THE CONTRACT S.149

AGENCY BY RATIFICATION

HOW? AGENT EXCEEDS OR

HAS NO AUTHORITY

PRINCIPAL CAN CHOOSE TO REJECT OR ACCEPT S.149

CAN EXPRESS OR IMPLIED S.150

EFFECT: PRINCIPAL IS

BOUND RETROSPECTIVELY FROM

THE DATE OF THE ACT BY AGENT AND

NOT THE DATE OF THE CONTRACT

S.149 (Bolton & Partners V

Lambert)CERTIFICATION OR ACCEPTANCE

OF AN ACT DONE WITHOUT AUTHORITY

CONDITIONS FOR RATIFICATION

UNAUTHORISED ACT OF AGENT

MUST BE A LEGAL – BROOK V HOOK (agent forged signature

of principal)

AGENT ACTING AS AN AGENT AND NOT IN HIS OWN NAME

(Keighley Maxted & Co V Durant – the wheat case)

PRINCIPAL MUST BE IN EXISTENCE (Kelner v Baxter -

the hotel case where the principal company was not yet

registered)

PRINCIPAL MUST HAVE CAPACITY AT THE TIME OF THE

ACT AND RATIFICATION (Boston Deep Sea Fishing &

Ice Co V Farnham)

ACT DONE WITH FULL KNOWLEDGE OF MATERIAL FACTS BY PRINCIPAL AT THE

TIME OF RATIFICATION S.151 (Marsh V Joseph)

RATIFICATION OF THE WHOLE ACT AND NOT PART ONLY

S.152

RATIFICATION WITHIN REASONABLE TIME

(Metropolitan Asylum Board V Kingham & Sons – kes telur)

NO INJURY OR AFFECT INTEREST OF THIRD PARTY

S.153 Illustration (b)

AGENCY BY NECESSITY/EMERGENCY

An agent has authority, in an emergency, to do all such acts for the purpose of protecting his principal from loss as would be done by a person of ordinary prudence – S.142

How? When a wife is deserted or is justified and has no means of support

Where trustee situation arises

GREAT NORTHERN RAILWAY V SWAFFIELD – the lonely horse case

CONDITIONS FOR AGENCY BY NECESSITY

BEFORE AN AGENCY BY NECESSITY CAN ARISE:

MUST BE REAL AND ACTUAL EMERGENCY (Phelps James & Co V Hill – look at the danger, facilities, cost, time, distance etc)

INCONVENIENCE IS NOT AN EMERGENCY AND A SALE BY AGENT = CONVERSION (Sachs V Miklos)

AGENT ENTRUSTED WITH PRINCIPAL’S GOODS @ TRUSTEE SITUATION – S.142 (Jebarra V Ottoman Bank)

IMPOSSIBLE TO GET PRINCIPAL’S INSTRUCTION EVEN AFTER USE ALL REASONABLE DILIGENCE S.167 (Springer v Great Western Railway Co – the

stinky tomato ship case)

AGENT ACTS IN GOOD FAITH

EFFECTS OF AGENCY BY NECESSITY

AGENT PROTECTED AGAINST ANY CLAIM BY

PRINCIPAL

AGENT ENTITLED TO ADDITIONAL PAYMENT

FOR HIS EFFORTS IN PROTECTING PRINCIPAL’S

INTEREST

CONTRACT EXISTS BETWEEN PRINCIPAL

AND THIRD PARTY

AGENCY BY ESTOPPEL

S.180 – PRINCIPAL IS

BOUND

WHEN PRINCIPAL INDUCES 3RD PARTY TO BELIEVE A PERSON IS HIS AGENT

PRINCIPAL DOES NOT INFORM 3RD PARTY THAT

AGENCY HAS TERMINATED

FREEMAN & LOCKYER V BRUCKHURST PARK

PROPERTIES LTD –director acted on behalf of company & contracted with 3rd party

with the other directors’ knowledge

CLASSIFICATION OF AGENCY

CLASSIFICATIONACCORDING TO

EXTENT OF AUTHORITY

UNIVERSAL AGENT – HAS

EXTENSIVE POWERS,

ALMOST LIKE PRINCIPAL E.G.

POWER OF ATTORNEY

GENERAL AGENT – POWERS

NORMAL TO NATURE OF

BUSINESS OR TRADE

SPECIAL AGENT – LIMITED AND

SPECIFIC AUTHORITY

ACCORDING TO FUNCTIONS

DEL CREDERE AGENTS WHO GUARANTEE’S

3RD PARTY PERFORMANCE

FACTOR/ COMMERCIAL AGENT – SELLS GOODS UNDER HIS OWN NAME

AND HAS LIEN AS COMMISSION

BROKERS AUCTIONEERS

BANKER AS AGENT FOR

CUSTOMER AND BANK

EMPLOYEES AS AGENT FOR THE

BANK

AUTHORITY OF AGENT

TYPES OF AUTHORITY

ACTUAL AUTHORITY

EXPRESSED ORALLY OR IN WRITING

S.141

ANY NECESSARY LAWFUL ACT

ANY USUAL LAWFUL ACT

APPARENT/ OSTENSIBLE AUTHORITY

ALL SUCH ACTS WHICH ARE

PROPER/ NECESSARY/ USUAL

DEPENDS ON THE CIRCUMSTANCES

CUSTOMS OR USAGE OF THE

TRADE

SITUATION AND CONDUCT OF

PARTIES

APPARENT OSTENSIBLE AUTHORITY

PRINCIPAL BY WORDS / CONDUCT LEADS 3RD PARTY TO BELIEVE

AGENT HAS AUTHORITY – S.190

GRAPHICS LINES PTE LTD V CHAI CHEE MEIN

– Kelab Malam

AGENT PREVIOUS AUTHORITY

TERMINATED WITHOUT NOTICE TO 3RD PARTY

OVERBROOK ESTATES V GLENCOMBE

PROPERTIES LTD – auctioneer exceeded

authority

PRINCIPAL BOUND IF AGENT MAKES

MISREPRESENTATION WITHIN HIS AUTHORITY

AGENT IS ALSO LIABLE FOR

MISREPRESENTATION

DIFFERENCES BETWEEN IMPLIED USUAL AUTHORITY AND APPARENT AUTHORITY

IMPLIED USUAL AUTHORITY

BASED ON INFERENCE

DRAWN FROM AGREEMENT BETWEEN PRINCIPAL & AGENT

APPARENT AUTHORITY

BASED ON REPRESENTATION MADE BY PRINCIPAL TO 3RD PARTY

IRRESPECTIVE OF AGREEMENT BETWEEN PRINCIPAL AND AGENT

EFFECTS OF CONTRACTS MADE BY AGENTS

CONTRACT IS BINDING ON PRINCIPAL – EFFECTS

DEPENDS WHETHER 3RD PARTY AWARE OF

EXISTENCE OF PRINCIPAL

CATEGORIES OF PRINCIPAL

NAMED PRINCIPAL

DISCLOSED PRINCIPAL

UNDISCLOSED PRINCIPAL

NAMED PRINCIPAL

AGENT HAS NO RIGHTS/LIABILITIES

• S.183 – agent cannot personally enforce

• s.179 - Only principal can sue / be sued under the contract

• Condition: agent must act within his authority

EXCEPTIONS:

• If agent agrees to accept liability – CHIN YUEN TUNG V BEP AKETIK

• If contract is in the agent’s own name

• If agent signs negotiable instrument in his own name without disclosure of agency – KAVENA MEYDIN V KOMERAPPA CHITTY

• Agent exceeds authority and not ratified – breach of warranty

• Agent is liable under custom / norm of trade

DISCLOSED PRINCIPALAGENT HAS NO

RIGHTS/LIABILITIES

• S.183 – agent cannot personally enforce

• s.179 - Only principal can sue / be sued under the contract

• Agent presumed liable – S.183(a), (b) & (c)

• s.186 – both agent and/or /both principal may be liable

EXCEPTION #1:

• where contract is made by an agent for the sale or purchase of goods to overseas merchant;

• Merchant does not standing and credit of principal

• Contract is vide local agent

• No privity of contract unless expressed in agreement

EXCEPTIONS #2

• Name of principal not disclosed

• Agent remains liable even if/after 3rd party discovers principal

• Agent can be released by 3rd party

EXCEPTIONS #3:

• Even if principal disclosed – cannot be sued/immunity

• e.g. sovereign, ambassador, minor, unsound mind

UNDISCLOSED PRINCIPALWHERE AGENT HAS AUTHORITY TO BIND

PRINCIPAL

• IDENTITY OR EXISTENCE OF PRINCIPAL NOT DISCLOSED

RIGHTS OF 3RD PARTY

• CAN CLAIM AGENT/ PRINCIPAL – S.186

• AGENT CAN BE PERSONALLY LIABLE – PERNAD TRADING SDN BHD V PERSATUAN PELADANG BAKTI MELAKA (Kes Baja)

• 3rd Party can choose who to sue unless there is undue delay or he represents he wont sue principal

RIGHTS OF THE PRINCIPAL

• CAN REQUIRES 3RD PARTY TO PERFORM THE CONTRACT AND VICE VERSA – S.184(a)

• PRINCIPAL’S RIGHTS SUBJECT TO RIGHTS & LIABILITIES AS BETWEEN AGENT AND 3RD PARTY (S.185) e.g. 3rd party’s rights to set-off or counter claim vs principal OR agent

• PRINCIPAL WHO DISCLOSES HIMSELF BEFORE COMPLETION OF CONTRACT CANNOT ENFORCE CONTRACT VS 3RD PARTY IF 3RD PARTY CAN PROVE THAT IDENTITY OF PRINCIPAL IS MATERIAL – S.184(b)

RIGHTS OF AGENT

• AGENT CAN ENFORCE HIS OWN CONTRACT VS 4RD PARTY

• CANNOT ENFORCE IS HE FALSELY REPRESENTS HIMSLEF AS AGENT IN THE TRANSACTION –S.189

DUTIES OF AGENT TOWARDS PRINCIPAL

DUTIES STATED IN CONTRACT OR (IF SILENT) IN THE

CONTRACTS ACT

TO OBEY THE PRINCIPAL’S INSTRUCTIONS

IF NO INSTRUCTIONS FROM PRINCIPAL, MUST ACT ACCORDING TO THE CUSTOMS PREVAILING IN BUSINESS OF THE SAME KIND.

TO EXERCISE CARE & DILIGENCE AND USE ALL SKILLS HE POSSESSES IN CARRYING OUT HIS WORK

TO RENDER PROPER ACCOUNTS WHEN REQUIRED

TO ACT IN GOOD FAITH AND NO CONFLICT OF INTEREST

NOT TO MAKE SECRET PROFIT FROM THE PERFORMANCE OF HIS DUTY

TO PAY HIS PRINCIPAL ALL SUMS RECEIVED ON THIS BEHALF

CANNOT DELEGAT HIS AUTHORITY TO ANOTHER PERSON

TO OBEY THE PRINCIPALS INSTRUCTIONS

S.164 – AGENT BOUND TO CONDUCT BUSINESS

ACCORDING TO DIRECTIONS OR CUSTOM

FAILURE TO OBEY- BREACH OF CONTRACT: AGENT

LIABLE FOR PRINCIPAL’S LOSS

TURPIN V BILTON - FAILURE OF AGENT TO

INSURE VESSEL

AGENT DOES NOT HAVE TO OBEY ILLEGAL

INSTRUCTIONS

IN THE ABSENCE OF INSTRUCTIONS, TO ACT ACCORDANCE WITH PREVAILING CUSTOMS

s. 164 & Illustration (b) Any loss or profit

accrued to be made good by agent to

principal

An agent is bound to conduct the business of his principal according to the directions given by the principal, or in the absence of any such

directions, according to the custom which prevails in doing business of the same kind at

thepiace where the agent conducts the business. When the agent acts otherwise, if any loss be sustained, he must make it good to his

principa[ and if any profit accrues, he must account for it

TO EXERCISE CARE & DILIGENCE AND USE ALL SKILLS

S.165: An agent is bound to conduct the business generally possessed by persons engaged in similar business, unless the principal has notice of his want of skill. The agent is always bound to act with reasonable diligence, and use such skills as he possesses; and to make compensation to his principal in respect of the direct consequences of his own neglect, want of skill, or misconduct, but in respect of loss or damage which are indirectly or remotely caused by such neglect, want of skill or misconduct

E.G.SAME SERVICE AS PROFESSIONAL (UNLESS PRINCIPAL ALREADY NOTICES LACK OF SKILL) OR IF SELLING GOODS, TO SELL AT BEST PRICE – ANDREWS V RAMSAY & CO

AGENT OBLIGED TO TELL PRINCIPAL OF OTHER BETTER OFFERS EVEN IF CONTRACT ALREADY CONCLUDED – KEPPEL V WHEELER

TO RENDER PROPER ACCOUNTS WHEN REQUIRED

S.166: AN AGENT IS BOUND TO RENDER PROPER ACCOUNTS TO HIS PRINCIPAL ON DEMAND

PROPERTY OF THE PRINCIPAL AND AGENT SHOULD NOT BE MIXED

LYELL V KENNEDY – AGENT IS BOUND TO KEEP MONEY/PROPERTY SEPARATELY FROM HIS OWN PROPERTY

TO COMMUNICATE WITH PRINCIPAL DURING EMERGENCY/DIFFICULTY

S.167IT IS THE DUTY OF AN AGENT, IN CASES OF

DICCULTY, TO USE ALL REASONABLE DILIGENCE IN

COMMUNICATING WITH HIS PRINCIPAL AND IN

SEEKING TO OBTAIN HIS INSTRUCTIONS

WHEN?IN CASESOF EMERGENCY

OR DIFFICULTY

IF IMPOSSIBE, AGENT CAN USE OWN DISCRETION TO SAFEGUARD THE INTEREST OF THE PRINCIPAL – S.142

AGENT CANNOT BECOME A PARTY TO A CONTRACT WITH PRINCIPAL –

AMSTRONG V JONES – AGENT SOLD HIS OWN SHARES TO PRINCIPAL

PRINCIPAL HAS RIGHT TO REPUDIATE CONTRACT EVEN IF THE AGENT ACTED

FAIRLY – WONG MUN WAI V WONG THAM FATT (PRINCIPALS SHARE OF

LAND SOLD BELOW MARKET VALUE TO AGENT’S WIFE

AGENT CANNOT ACT FOR BOTH PARTIES TO A TRASACTION WITHOUT

BOTH PARTIES CONSENT – FULWOOD V HURLEY (CLAIMED COMMISSION

FROM BUYER AND SELLER)

S.169 - 'lf an agent, without knowledge of his principal, deals in the

business of the agency on his own account instead of on account of his principal, the principal is entitled to

claim from the agent any benefit which may have resulted to him from the

transaction'.

PRINCIPAL CAN RECOVER FROM THE AGENT ANY BENEFIIT THE AGENT MAY HAVE OBTAINED EVEN IF THERE IS NO

LOSS

AGENT MUST DISCLOSE TO THE PRINCIPAL EVERYTHING RELATING TO

THE CONTRACT BUT NOT TO THE OTHER PARTY

CANNOT DISCLOSE THE PRINCIPAL’S SECRET TO ANOTHER

MUST PAY ALL PROFIT AND MONIES INTO THE PRINCIPAL’S ACCOUNT

CANNOT MIX WITH AGENT’S PROPERTY – LYELL V KENNEDY

TO ACT IN GOOD FAITH AND NO CONFLICT OF INTEREST

NOT TO MAKE ANY SECRET PROFIT• bribe/ secret commission/any financial advantage

which is over and above the commission agreed under the agency contract

• If the principal does not consent to it, remedies are available (ANDREWS V RAMSAY & CO)

SECRET PROFIT

• lf an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that the dealing of the agent have been disadvantageous to him.S.168

NOT TO MAKE ANY SECRET PROFIT

• REMEDIES OF THE PRINCIPAL– may repudiate the contract made by his agent– may recover the amount of the bribe (s.169) – TAN KIONG HWA V

ANDREW S.H. CHONG– May refuse to pay agent’s commission/remuneration– May terminate agency for breach of duty – BOSTON DEEP SEA FISHING

& ICE CO V ANSEL– May sue both agent and person who gave bribe for losses suffered –

MAHESAN V MALAYSIAN GOVERNMENT OFFICERS COOPERATIVE HOUSING SOCIETY

– Criminal offence under S.4 Prevention of Corruption Act 1961

TO PAY TO THE PRINCIPAL ALL MONIES RECEIVED ON HIS BEHALF

S.170: AGENT MAY RETAIN, OUT OF ANY SUMS RECEIVED ON ACCOUNT OF THE

PRINCIPAL, A) ANY SUMS OWED.TO THE AGENT IN RESPECT OF ADVANCES

MADE/ EXPENSES INCURRED BY AGENT IN CONDUCTING THE BUSINESS.

B) ANY COMMISSION/REMUNERATION PAYABLE TO THE AGENT.

S.171: SUBJECT TO THE DEDUCTIONS SPECIFIED IN SECTION 170, THE AGENT IS BOUND TO PAY TO HIS PRINCIPAL ALL

SUMS RECEIVED ON HIS ACCOUNT

S.174: AGENT’S HAS RIGHT TO RETAIN PRINCIPAL’S PROPERTY IN HIS

POSSESSION UNTIL HIS REMUNERATION IS PAID

AGENT ONLY HAS RIGHT TO RETAIN ION BUT NOT POWER TO RESELL/SELL THE GOODS UNLESS WITH THE PRINCIPAL’S

CONSENT

CANNOT DELEGATE AUTHORITY

DELEGATUS NON POTEST DELEGARE – AGENT CANNOT EMPLOY ANOTHER PERSON TO DO HIS DUTY

EXCEPTION:

WHERE THE PRINCIPAL HIMSELF APPROVES THE DELEGATION OF AUTHORITY (DE BUSSCHE V ALT)

IT IS PRESUMED FROM CONDUCT THAT AGENT HAS POWER TO DELEGATE

IN CASE OF EMERGENCY

DELEGATED ACT IS PURELY CLERICAL OF ADMINSTERIAL (ALLAM & CO V EUROPA

POSTER SERVICES LTD - SOLICITORS)(JOHN MCCANN & CO V POW – SALES

AGENT)

WHERE CUSTOM PERMITS

WHERE DELEGATION IS NECESSARY TO COMPLETE THE BUSINESS

DUTIES OF PRINCIPAL TOWARDS AGENT

INDEMNIFY & REIMBURSE AGENT – S.175: ALL COSTS, LOSS LIABILITIES INCURRED IN THE EXERCISE OF THE AGENT’S AUTHORITY BORNE BY THE PRINCIPAL (HICHENS, HARRISON , WOOLSTON & C0 V JACKSON & SONS

CANNOT PURPOSELY STOP OR HINDER AGENT FROM EARNING COMMISSION E.G. PRINCIPAL REFUSES TO ACCEPT CONTRACT MADE BY

AGENT OR PRINCIPAL APPOINTS ANOTHER AGENT

TO PAY COMMISSION/REMUNERATION - S.172. IF GUILTY OF MISCONDUCT(WRONGFUL/IMPROPER CONDUCT E.G. BRIBE) – NO

COMMISSION (ANDREWS V RAMSAY)

DUTIES OF PRINCIPAL TOWARDS AGENT

WHEN DUTY TO INDEMNIFY

ARISES:

AGENT INCURRED LOSSES OR LIABILITIES IN

PERFORMANCE OF HIS DUTIES (KYALL & EVATT V LIM KIM KEAT – SALE OF SHARES PURSUANT TO A

WILL)

AGENT CAUSES INJURY TO 3RD PARTY IN THE COURSE

OF HIS DUTY – S.176 ILLUSTRATION (b)

AGENT IS INJURED DURING THE COURSE OF HIS DUTIES DUE TO THE

PRINCIPAL’S NEGLIGENCE S.178

TERMINATION OF AGENCY

TERMINATION

BY ACT OF PARTIES (AGENT AND PRINCIPAL)

BY OPERATION OF LAW

TERMINATION BY ACT OF THE PARTIES

BY MUTUAL CONSENT –

S.154

PRINCIPAL’S UNILATERAL

REVOCATION/ RENUNCIATION

AGENT’S UNILATERAL

RENUNCIATION

UNILATERAL TERMINATION BY PRINCIPAL – S.156

REVOCATION CAN BE AT ANY TIME BEFORE AGENT

EXERCISES AUTHORITY

CAN BE EXPRESS/IMPLIED (S.160)

REASONABLE NOTICE MUST BE GIVEN (S.159) OTHERWISE

PRINCIPAL LIABLE TO DAMAGES

REASONABLE NOTICE DEPENDS ON FACTS OF THE

CASE

SOHRABJI V ORIENTAL SECURITY ASSURANCE – 3 ½

MONTHS NOTICE INSUFFICIENT TO TERMINATE

A 50 YEAR OLD AGENCY

SYARIKAT JAYA V STAR PUBLICATION (M) SDN BHD –

6 MONTHS NOTICE SUFFICIENT TO TERMINATE A

SOLE AGENCY

TERMINATION EFFECTIVE WHEN COMES TO THE

NOTICE OF THE AGENT & 3RD PARTY (S.161)

IF AGENT OR 3RD PARTY DOES NOT KNOW OF THE

REVOCATION/ TERMINATION – NOT EFFECTIVE (PICHAPPA

CHITTY V AH JAH)

FIXED AGENCY – EARLY TERMINATION + DAMAGES FOR BALANCE TENURE IF

INSUFFICIENT CAUSE S.158

UNILATERAL TERMINATION BY PRINCIPAL – EXCEPTIONS

EXCEPTIONS WHERE PRINCIPAL CANNOT REVOKE AGENCY:

AGENT ALSO HAS INTEREST IN PROPERTY WHICH IS

SUBJECT TO THE AGENCY S.155

SMART V SANDERS

FIRTH V FIRTH : AGENT PAID

FIRST ON BEHALF OF PRINCIPAL

AFTER AUTHORITY HAS

BEEN PARTLY EXERCISED BY

AGENT – S.157

READ V ANDERSON –

BESTA [PLACED ON BEHALF OF

PRINCIPAL, CANNOT REVOKE

AUTHORITY UNTIL PAID FOR

UNILATERAL RENUNCIATION BY AGENT

S.154 – BY AGENT RENOUNCING THE BUSINESS OR THE RELATIONSHIP OF

AGENCY

S.160 : RENUCIATION CAN BE EXPRESSED

OR IMPLIED

S.159 : REASONABLE NOTICE TO BE GIVEN

TO PRINCIPAL OR MAY BE LIABLE FOR

DAMAGES

S.156 : PREMATURE RENUNCIATION BY AGENT – MAY BE

LIABLE TO DAMAGES

TERMINATION BY OPERATION OF LAW

BY PERFORMANCE OF CONTRACT – S.154

EXPIRY OR LAPSE OF CONTRACT EVEN IF WORK NOT COMPLETED

DEATH OR PRINCIPAL OR AGENT (S.154) PROVISO: (i) No termination if agent has interest in agency property (S.155)

(ii) Due notice must have been given to agent (S.161)(iii) agent must take reasonable steps to protect interest of principal (s.162)

• INSANITY OF PRINCIPAL OR AGENT (S.154) – YONGE V TOYNBEE• BANKRUPTCY OR INSOLVENCY OF PRINCIPAL

• EVENT OCCURS WHICH RENDERS THE AGENCY UNLAWFUL