Law of Agency – Agency Law St Lucia
The proposed agent must accept theprincipal‘s offer to act as an agent; that’s the agency contract and it gets the ball rollling in terms of the agentbeing “out there” representing the principal, as if she or he were a clone thereof.
Here’s the flow of the action:
A great example is a lawyer:
- Lloyd Duhaime, lawyer hired by John Doe to sue Camosun College for “negligent hiring of business law professors”.
- Lawyer (Lloyd Duhaime) signs the legal paperwork and manages John Doe’s litigation.
- If the College offers to settle the case by reimbursing Doe’s tuition, and Duhaime accepts it, that acceptance is contractually binding on Doe even though he had no direct dealings with Camosun the whole time!
… or the real estate agent (aka “realtor”) such as Vancouver realtor Mitchell Mingie (pictured, left).
You want to buy a house but know little of the in’s and out’s of houses or house buying. Mr. Mingie does – he trained for it, certified by a government agency and that’s all he does – so you hire him to be your real estate agent and enter into an agency contract with him. Then, he does his thing; searching “for sale” houses for you within the general parameters you have given him.
Agency relationships like this play themselves out everwhere on a daily basis.
The “third party”
The third point of the triangle!
Third-party must have notice of agent’s status.
QNS Paper v Chartwell
When the services contract C had negotiated fell through, QNS looked to C for damages.
HELD: if the third-party does not require the identity of the principal and theagent is clear as to his status as an agent, the agent is just that and is not personally liable for breach of the principal+third party contract.
Some commonly known agents
- Lawyers and attorneys: represent persons in legal disputes or negotiations.
- Travel agent: represents principals to make travel contracts.
- Real estate agent: negotiates for their client in real estate deals.
- Sports agent: negotiates for their athlete/client with the sports club.
- Entertainment agents: try getting Britney Spears on the telephone!
Note: agents do not become employees of their principal!
Nothing of the law of agency detracts from the basic law that agent is always personally liable for his/her torts; nothing in the cloak of agency shields the agent for his direct liability in regards to his errors or omissions. The agency agreement merely adds another level: that the principal may also be liable towards another for the same tort.
In any event, the Canadian law is presently unclear on the extent of a principal’s liability for anagent’s tortuous conduct. The most prevalent theory: the principal can be liable for agent’s torts as well if committed within scope of agent’s authority.
As with vicarious liability of employers for independent contractors, the tendency of the Courts now is to accommodate liability rather than exclude it, deferring to the principle of respondeat superior.
An agency relationship may be implied by law, but this is rare given the consequences in law as to the potential obligations of the principal.
Examples are a wife can be presumed to be agent for husband and vice-versa (rebuttable presumption) and in maritime law, a captain can bind ship owner re emergency repairs.
An agent may be geographically advantaged re third-party (have a travel agent in Paris arrange for my car rental upon my next visit).
Mentally incompetent persons cannot contract agency. Minors can be agent (!) and his actions – although a minor – if within the scope of authority, will fully bind the principal. When a minor is a principal, Infant Act contract voiding rights may apply so it’s not generally a good idea.
Power of Attorney (POA) – the ultimate agency agreement!
“I, Lloyd Duhaime appoint Jane Doe to be my attorney and negotiate and purchase a large coffee at the Moka House Coffee Shop. This power of attorney may be exercised during any legal incapacity on my part. Any previous power of attorney or any delegation of a previous power of attorney is hereby revoked.”
A principal does not lose her/his authority to contract for themselves while the agency agreement continues.
The principal must pay the agent for expenses incurred and “reasonable fee” for agency services, unless otherwise agreed.
A principal can revoke the agreement. This is essential or you could have a two-headed monster with both the agent and principal making entering into contradictory agreements, causing all kinds of legal quagmires. Usually, the agency agreement will specify when it ends.
- Loyalty is to her principal: not to the third-party.
- Honesty req’d – fiduciary duty.
- Cannot act for principal and third-party or represent any competing principal (subject to contractual or statutory exceptions)!
- Must keep accounts and report as required or if asked, on exercise of duty.
- Has authority set out in agency agreement or implied from the circumstances.
- Must follow instructions or will be liable for damages.
- If retained due to specialized knowledge, must perform to that standard.
Volkers v Midland Doherty
V gave instructions to an investment firm to deal with certain shares “first thing”. The investment firm hesitated and $ was lost to V as a result.
HELD: investment firm liable for loss as by hesitating, it had not followed instructions to act “first thing”.