law_of_Agency Chapter 3.pptVIP

The basic theory The basic theory of the agency device is to enable a person, through the services of another, to broaden the scope of his activities and to receive the products of another’s efforts, paying such other for what he does but retaining for himself any net benefit resulting from the work performed. External Relationship Civil law countries rules Direct representation Indirect representation Common law countries rules Disclosed principal (named principal) Partially disclosed principal (unnamed principal) Undisclosed principal Unauthorized contracts Direct representation Definition: agent acts with the third party in the name of principal. Show the name the principal Not show, but declare the existence of principal Who has the rights and liabilities with the third party? Principal: yes Agent: no Indirect representation Definition: agent acts with the third party in his own name. Who has the rights and liabilities with the third party? Agent: yes Principal: cannot hold the third party liable, cannot claim or sue the third party directly two contracts needed to claim or sue the third party: Contract between agent and the third party Contract between agent and principal to transfer the rights and duties from agent to principal Case: direct and indirect representation Facts: Anna wants to buy a set of furniture. However, as she knows little about furniture, she authorized Black to buy one for her. After market investigation, Black signed contract in the name of Anna with a furniture sales company. When the furniture delivered to Anna, she refuses to pay by saying she doesn’t like the furniture style. Issue: Is Anna liable to take delivery and pay? Decision: Yes. this is direct representation. Under direct representation, agent is free from contractual liabilities, and principal is liable for the contract. Case: direct and indirect representation Facts: Marry put her bicycle in a store and authorized the store to sell it. The store sold it to Peter but didn’