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Chapter 4 Agency

Chapter 4 of the document discusses the law of agency under the Agency Contract Act 1950 in Malaysia, outlining the definitions of agents and principals, types of agency, and the relationships between them. It covers how agency can be formed and terminated, as well as the responsibilities of both agents and principals. Additionally, it highlights the authority of agents and their eligibility, emphasizing the importance of following legal principles in business law.

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8 views19 pages

Chapter 4 Agency

Chapter 4 of the document discusses the law of agency under the Agency Contract Act 1950 in Malaysia, outlining the definitions of agents and principals, types of agency, and the relationships between them. It covers how agency can be formed and terminated, as well as the responsibilities of both agents and principals. Additionally, it highlights the authority of agents and their eligibility, emphasizing the importance of following legal principles in business law.

Uploaded by

ghiriv.k12224178
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

CHAPTER 4 :

AGENCY
CONTRACT ACT 1950 TOPIC 10
ENGLISH LAW
COURSE LEARNING
OUTCOME
 Apply appropriately the basic
concepts and principles of business
law in Malaysia. (CLO 2)

 Present effectively the basic


concept and principles of business
law in the related activities (CLO 3)
LEARNING OUTCOMES
 Explain the nature of law of agency

 Describe types of agency

 Interpret the relationship between principals and


agents as provided under the law

 Describe the termination of agency


DEFINITION
 AGENT – a person employed to do any act
for another or to represent another in
dealings with third person (Sec 135)
 PRINCIPAL – the person for whom such an
act is done, or who is so represented (Sec
135)
 AGENCY - RELATIONS EXISTING
BETWEEN THE PRINCIPAL AND AGENT
TWO CONTRACTS
 Between the principal and the agent from
which the agent derives his authority to act
for and on behalf of the principal

 Between the principal and the third party


through the work of the agent
 Any person who is eighteen years old or
above and who is of sound mind may be a
principal

 Any person may become an agent but


persons of unsound mind and who are below
eighteen years of age are not liable towards
their principals for acts done by them as
agents
AGENCY BY FORMATION
 By express appointment by the principal
 By implied appointment by the principal
 By necessity
 By ratification
 By estoppel
By express appointment by
the principal
 Sec 140

By implied appointment by the principal


- Sec 140
By necessity
 Sec 142
 Case : G.Northern Rly vs Swaffield
Springer vs G. Western Rly Co
Prager vs Blatspiel Stamp
By ratification
 Sec 149
 Sec 150 – Case : Bolton Partners vs Lambert

By estoppel
- Sec 190
- through words / actions of the principal,
resulting in a third party to believe he is an
agent
TYPES OF AGENCY BY
FUNCTION
 A BROKER
 A FACTOR (MERCANTILE AGENT)
 AUCTIONEER
 A DEL CREDERE AGENT
 BANKER
AGENCY IN RELATION TO
BANKING
 Bank as agent for customer – when banker receives
money from his customer as deposit, the banker is a
debtor and his customer is the creditor. On the other
hand, where the banker advances money as a loan
or other credit facility to his customer, the banker is
the creditor and the customer (borrower) is his
debtor
 Bank employees as agents for the bank – as
employees who are so authorized may act on behalf
of the bank. The bank liable for the torts committed
by its employees
AGENCY BY AUTHORITY
 universal – a person authorized to transact all the
business of his principal of every kind. He
authorized to perform all acts or duties which his
principal is empowered to perform.
 general – a person who acts for several principal
in a normal course of his business or profession
or who has the authority to act for a principal’s all
business of a certain kind such as banking or
legal.
 special – a person who acts for a principal only for
a particular purpose.
THE AUTHORITY OF THE
AGENT
 Authority may be actual or apparent –
expressly given by the principal (orally or
writing)

 Authority may be ostensible – not expressly


given by the principal but which the law
regards the agent as possessing although the
principal has not consented to his exercising
such authority
ELIGIBILITY
 PRINCIPAL - must have the ability to contract
 AGENTS - need not have the capacity to
contract
 Case : William Jacks Ltd vs Chan & Yong
Trading
RESPONSIBILITY OF AN
AGENT
 Follow the instructions of the principal
- Sec 164
- Case : Cohen vs Kittel
 Carefully and with full effort – Sec 165
- Case : Keppel vs Wheeler
 Provide a true account – Sec 166
 Communicate with principal – Sec 167 & Sec 142
 Does not make a secret profit – Sec 168 & Sec169
 Pay the principal all money received – Sec 170
 Does not represent the power – Sec 143
RESPONSIBILITY OF THE
PRINCIPAL
 Pay the agreed commission and benefits
– Sec 172
 Not to wilfully prevent or hinder the agent
from earning his commission – Sec 173
 To respect any lien – Sec 174
 To indemnify – Sec 175
TERMINATION OF AGENCY
 By agreement
 By the principal revoking the agent’s authority
 By the agents renunciation
 By performance
 By operation of law
 By frustration
QUESTIONS :

 IN WHAT WAYS MAY AN AGENCY


BE CREATED?

 STATE THE WAYS IN WHICH AN


AGENCY CAN BE TERMINATED

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