Commercial Law

In agency law, a consensual arrangement is formed by contract when one person, known as the
principal, grants power to another party, known as the agent, to work on behalf of and under
the direction of the principal in dealing with a third party. The principal, who forms the deal, is
bound by the conduct and words of an agent swapped by a third party.

However, in this task, we'll focus on obvious authority, which refers to an agent's authority as
seen by others. It happens in obvious authority where the principal gives the impression to the
third party (through actions or words) that the agent is authorized to contract. Third parties are
exempt from this theory if the agent acted properly and the principle gives them the impression
that the agent was authorized to act. The third party will also argue that they were induced into
the deal when the negotiator did not demonstrate that they wished to make the arrangement.
This is due to the party's focus on the third party's representation, which resulted in a defeat
due to the role the party had gained previously.

If a representation has been made, the principal would be obligated and therefore unable to
refuse the agent. This is because the agent's act was beyond the scope of the agent's obvious
jurisdiction, which was represented by the principal. As a result, even though the agent does
not have actual power, the principal will be obligated to a third party if the agent's arrangement
has expired or the agent behaves against the principal's actual authority. As a result, the agent
is founded on estoppel rather than the principal's approval.

Furthermore, it has been discovered that the doctrine of this imposes blame when a principal's
acts have led the public to believe that the relation or authority has been granted. This
definition is critical in understanding estoppel. The primary basis for this is that if the agent
seems to have power to act, and the principle purposefully permitted the agent to act, the
principle would be bound by it. What has to be determined is whether the principal worked
with the agent on purpose and what kind of company it is, since it might be sufficient to
presume that the agent has jurisdiction to carry out the act in question. The case Irving v.
Doctor Hospital of Lake Worth Inc. is an example of the law of evident authority, in which it was
determined that hospital responsibility should also have obvious authority. Since a physician is
responsible for a doctor's error, a medical doctor becomes the agent, and when a patient
receives care from the doctor, they trust in good conscience that they are being looked after on
behalf of the hospital.

Furthermore, the principle of estoppel is supported by the Civil Code. Article 1869 , like the Civil
Code, states that an agent may do an act if he or she is granted an expression of inference from
the theory. If the theory is aware that the agent is behaving but does not intervene. As a result,
these will differentiate private institutions such as hospitals, which would only exist by them,
such as physicians, because doctors are what run the hospital, and the hospital can not survive
without them. The hospital can only be seen as providing excellent services until a competent
doctor does excellent practice, and will also be made public within the health sector, which is
good for business. If they succeed in this, they will be able to go on in the financial department.
Hospitals will have a tough time excluding responsibility for the actions of their agents; any sort
of incompetence will jeopardize the hospital's class of health care.

In the case of Rama Corpn Ltd v Tin and General Investments Ltd (1952) , it was determined
that three types of estoppel are required: representation, dependence, and alteration of your
status as a result of such reliance. The theory, rather than the agent, must make the
representation. In dependence, the third party would have relied on the representation. It is
determined that even though the conditions of obvious authority are not met, the norm will be
bound by a contract if he is removed from the actions by disagreeing with the contract as
rendered on his behalf.

The major question in the case of Freeman and Lockyer v Buckhurst Park Properties (Mangal)
Ltd (1946) is whether the individual had apparent authority to employ the architects.
According to the trial judge, the individual had evident jurisdiction. The company's appeal from
the ruling was rejected by the court of appeals. Lord Diplock was confronted with a case
involving an agent's power to establish statutory rights and obligations between the principal
and a third party.

As a result of the earlier history on the operation of assumpsit and continuous absence in
English law, this section of the law has evolved reasonably rather than objectively, although this
is dependent on the facts of each case. The legal agreement between the principle and the
third party is established by the principle's delegation to the third party, which is supposed to
be and acted upon by the third party, whereby the agent has jurisdiction to enter into a
contract on behalf of the principle within the limits of obvious authority. As a result, the
principle is obligated to fulfill all contractual commitments. When the employer acts on the
client by entering into a contract with the lawyer, it acts as an estoppel, prohibiting the
principle from claiming that the contract does not bind him.

The representation that gives the appearance of authority can be shown in a variety of ways.
The most common is representation by actions, which allows the agent to behave in a manner
that the principle is mindful of and that the agent has the right to enter into the contract on the
principle's behalf, which is normally real authority.

Apparent authority may be used to establish power. This may include extending an agent's
actual authority beyond the dissolution of agency relationships, dressing an agent with
authority where he would normally have actual authority but for the presence of limitations
that are unknown to the third party, and dressing an agent with authority where he would
normally have actual authority but for the existence of limits that are unknown to the third
party. In Barrett v Deere (1828) , for example, the agent went into the principle's house and
pretended to be trusted with the conduct of the principle's business. Payment of a debt to the
agent was deemed a good payment to the principle since the principle permitted the agent to
access his business premises and pretend to be liable for its actions. In the case of First Energy
Ltd. v. Hungarian International Bank Ltd. (1993) , a senior regional manager of a bank was found
to have evident authority to express head office acceptance of a certain form of loan even if he
lacked real authority or approval. Furthermore, estoppel would not allow the theory to take
action if he approved of the agent's unauthorized act. The theory could sue and be sued on the
contract if obvious authority was actually authority.

Strict secondary liability, in contrast to vicarious liability, was created under the common law
doctrine of agency. In which the respondeat superior bears the superior's responsibility for
their subordinate's actions. As a result, they bear the responsibility of every third person who
has the obligation to supervise the work of someone who disobeyed the legislation. Tort law
laid the groundwork for this. Employers are vicariously responsible for their workers'
incompetent actions under the respondeat superior theory. An act must be either authorized or
associated with an authorised act in order to apply. As a result, evident jurisdiction may be
linked to this, making the theory responsible for the agent's actions. An employer will be held
liable if it can be shown that the employee did not obey orders and carried out the duties in a
different manner; however, the employee will not be held liable if he behaved on his own right
rather than on behalf of the employer and engaged in a frolic.

In most cases, an employer will be found responsible for an employee's assault. However, since
the employer is an independent contractor, he will not be found vicariously responsible for the
contractor's tortious actions unless the contractor injures someone to whom the employer
owes a non delegable duty of treatment. Employers are therefore liable under the common law
principle of acting in one's own rights by acting by another. And if the negligence was
committed by an individual who rented the vehicle, a car owner will be held liable under tort
law. As a result, the owner is the principal, and the agent is the driver, who may or may not be
driving for the owner, such as running a mistake for the owner.

According to the constitution, a corporation should only operate through its staff and officers.
As a result, it's critical to consider whether the rule of agency or vicarious liability may be used
to hold the corporation responsible in tort. This is an impartial measure since proving guilt
necessitates a state of mind in relation to the corporation. Meridian Global Funds Management
Asia Limited v. Securities Commission [1995] involved two employees who worked beyond
their jurisdiction by obtaining shares of business funds. The executives, on the other hand, were
completely unaware of this. The question here is whether the management was conscious, or
should have been aware, that the business required such shares. This was determined by the
judge. If there is ostensible jurisdiction, such as when agents acted beyond their authority or
staff acted in accordance with their roles and their experience may be useful to their
businesses, they could be held responsible as joint tortfeasors, particularly if the directors have
taken responsibilities on their behalf and the company's behalf.

As a result, if a director is authorized to make certain types of claims on behalf of the

corporation and does so improperly to a third party, resulting in a liability, the company would
be responsible, even if the representation was wrong in authorizing what really needs to be
done. Furthermore, the jurisdiction is fact-based and is significantly more than that, since the
employee would have had the opportunity to commit fraud. Panorama Developments Limited v
Fidelis Furnishing Fabrics Limited [1971] involved a business executive who committed theft by
hiring cars for his own use, which the boss was unaware of. The administrator also does
business under the company's name and has managerial duties, implying that he or she has the
authority to hire vehicles. As a result, the corporation is responsible. Where an employer
indemnity has been applied, the vicarious liability theory should be dismissed. When an
employer gets sued, they have the option of suing the wrongdoer for an indemnity in order to
recoup their losses. When this theory was applied in Lister v Romford Ice Cold Storage [1956] ,
it was highly criticized. In this case, a phrase may not be inferred into a contract at common law
until it meets the criterion of certainty, which is based on the idea that an inference must be
precise and obvious.

The similarities between agency and vicrarious libility demonstrate the doctrines' overlap. Both
include situations in which one person's (agent's) actions can obligate a second person's
(principle's) actions against a third person (third person). The agent's actions can result in
obligations between the third party and the policy, as well as obligations between the principle
and the third party. In vicarious liability, on the other hand, the act may make the principle
responsible to a third party, but it does not grant the principle any protection against the third
party. ‘In ordinary commercial relations, the contractor can hardly ever rely on the real
authority of the agent at the time of entering into the contract,' as Diplock LJ pointed out. This
is due to the fact that the other party would not be able to agree to the terms of the agent's
appointment. As a result, the third party depends on an interpretation of the agent's
jurisdiction, i.e. the agent's obvious authority.

In the other hand, if the agent lacked jurisdiction, a third party will also carry out a deal that is
not in the principal's favor. Especially if restrictions are imposed, if the concept reflects a
common authority for the agent to operate, the actor always gains the authority as an agent.
The above-mentioned case of Freeman & Lockyer v Buckhurst Park Properties Ltd [1964] can be
studied in greater depth. This case concerns two individuals who formed a corporation that
requires them to purchase and then sell land. Both of them had a candidate. The right to name
a managing director was included in their arrangement contract, but neither of them used it.
One of the partners commissioned a team of architects to work on the property, which they
did. When the architect demanded payment, it was discovered that the associate was not a
managing director and thus lacked the right to hire him. He did, however, seem to have power
and the board was aware that he had roles in the company that meant he was the managing
director, and his conduct in recruiting the architects was limited by the normal authority of a
managing director's duties.

The theory would have conveyed to the other party that the agent has the power to act on the
principle's behalf in order for the agents' actions to be binding in apparent authority. The third
party must have been convinced that the agent had the required authority. The principal would
not be liable to the third party if the portrayal of authority is granted by a person claiming to be
the agent, but the false agent will be legitimately accountable to the third party for violating the
authority arrangement. Words or acts may be used to create a representation. Whether there
is a clause stating that there is a duty to chat, which is extremely doubtful, expressing nothing
would not count as a representation. A woman entered into a deal for the sale of her husband's
house in Spiro v Lintern [1973] , and he did nothing. Following the sellers' discovery of costs
associated with the house's completion. By saying nothing, the husband was estopped from
denying his wife's contracting power. As a result, the third party would have relied on the
principal's representation to create apparent authority. In certain cases, the third party joining
the deal would be able to demonstrate this. This was not shown in this situation because the
representation and dependency occurred after the contract was signed. In this case, it seems
that the third party will be obligated to behave to their detriment.

Companies are required to work by agents and representations, which adds to the difficulty.
The agents' jurisdiction must come from the company's agents. The principal would not be
obligated if the agent serves and then contracts. Unless the principal gives the agent the power
to make claims regarding the agent's own authority to work on behalf of the principal in
dealings. This topic came up again in the case of First Energy Ltd v Hungarian International Bank
Ltd [1993], in which a person decided to open a credit account with the bank and dealt with the
senior manager of the branch. The person was aware that the boss lacked the authority to
grant money advances, and that the only way to do so would be with the approval of the head
office. Despite having no authority, the manager wrote to the individual, stating that the credit
facility had been authorised by head office. The Court of Appeal decided that when the
manager seemed to have jurisdiction to write to the client informing him of the head office's
decision, the bank was bound by the manager's note. The House of Lords dismissed the
contention that the principle had represented to the third party that the agent was authorized
to make a representation on behalf of the principle to the degree that the agent had actual
authority to take on the contract with the third party in Armagas Ltd v Mundogas SA [1986] , in
which the principle had represented to the third party that the agent was authorised to make a
representation on behalf of the principle to the extent that the agent had actual authority to
take on the contract with the third party

It is important to remember that the third party cannot rely on the principle of obvious
authority if the third party is aware that the agent lacks real authority. In this case, the other
party must show that they did not depend on the principle's representation. The auctioneer did
not have the seller's authority to make claims about the property being sold in a language he
used at an auction sale, according to Overbrooke Estates Ltd v Glencombe Properties Ltd
[1974]. Before the auction, the auctioneer told a potential bidder that the local government has
no financial interest in the land. Following this argument, the buyer purchased the house, only
to discover later that it was in a location slated for demolition. The purchase, on the other
hand, was constrained by the purchase because, if the auctioneer had authority to make a
representation, he still had the obvious authority to make the bid legitimate. It was the buyer's
responsibility to double-check this. While there is a moral boundary that limits legal liability for
misrepresentation, it is important to remember that this does not grant the principal the
freedom to limit the agent's evident authority to render claims. The Misrepresentation Act of
1967, s.3 governs this.

The principles of apparent jurisdiction and vicarious responsibility converge. Both doctrines
would hold an employer responsible for the injury incurred to workers in the vast majority of
cases. For example, if an employer commits a crime when working within the framework of
their employment and with authority, they may be held liable under any doctrine.

Franchises are another example of how apparent jurisdiction supports vicarious liability. In real
authority, a franchisor can be vicariously morally responsible for a franchisee's activities , as can
be seen in the case of obvious authority. And if there was apparent jurisdiction, a franchisor
may also be held responsible for the franchisee's actions. If a franchisor behaves or does not act
in a manner that leads a third person to believe that the franchisee is the franchisor's
representative, this is known as apparent authority.

There would be an obvious jurisdiction if a third party takes advantage of misrepresentation to

its detriment, even if there is little proof of a principal-agent relationship. When determining
obvious authority, three things must be proven: first, the principal's representation; second, a
third person's dependence on the principal's representation; and third, the third person's
changing of place. This demonstrates the importance of third-party confidence.

It's worth noting that in franchise situations, obvious authority claims are made by franchised
departments and well-known brands. As a result, the franchise spot is often filled. Many courts
believe that the franchisee's advertisement is the source of the principal's representation. The
complainant depended on the representation in the majority of evident authority cases. It must
be shown that the other party did not depend on the counsel to resolve vicarious liability claims
arising from evident authority proceedings. Notifications of self-governing products should be
used to resolve apparent authority situations in franchising.

A landlord gave notice pursuant to a contract authorizing his occupant to perform repairs
within six months in Hughes v Metropolitan Railway (1877) . The landlord then entered into
lease purchase agreements with the borrower, but when those talks fell apart, the landlord
sought to forfeit the lease (as the lease allowed) on the basis that the tenant had failed to make
the necessary repairs. The court determined that joining agreements only increased or created
new obligations owed by the promisee to the promisor, not to raise or create new obligations
owed by the promisor to the promisee. As a result, it can't be used to start a new cause of
action. This is not to say that the promisor must necessarily be the victim, rather than the
defendant; it simply means that the estoppel will not have a cause of action, but will only assist
a plaintiff in proving their case under a different cause of action (such as breach of contract).
This is analogous to tort law in that a breach of fiduciary responsibility may be considered a tort
offense. It is reasonable to believe that the agent is liable for the principal's damages.
Disciplinary damages may be compensated in tort cases if intent is proven. When it is
determined that the agent gained from the abuse, the principal has the right to terminate all
transactions with third parties that result from the breach of fiduciary duty.

This case examines whether obvious jurisdiction imposes vicarious responsibility in Daniel
Oldakowski et al M.P. Barrett Trucking Inc (2004) . According to the respondeat superior
doctrine, a person is responsible for a tort perpetrated by another if the tort is connected to
the duties and occurs in a workplace setting. This means that if a reckless act happens while
dealings, you would not be held liable by the independent contractor. There are several cases
of this, such as a company being made vicariously liable for an independent contractor's
incompetence when conducting a non-delegable obligation owed to the employer by contract.

Someone who commits a tortuous crime is expected to be found accountable by anyone who is
injured as a result of their actions. This is so when an agent behaves under their authority as an
agent, and a principal may be found liable to third parties for the agent's actions. This dates
back to the days of common law, when a servant was considered the master's property. Since
the master has complete control of the servant's actions, whether the master was unfair. If the
servant's act happened in the dealing and the limitations of the agent's work form determine
vicarious liability against the principal.

For the time being, this set of rules has been reserved in the statute for at least two reasons.
For starters, because the employer has the authority to supervise and dismiss the employee,
and because the employer is not superior and faces the possibility of being held responsible,
the employer would be more vigilant in carrying out his duties. This places the principal in
charge of the welfare of others. Also, in terms of public policy, an affected third party is
generally in the employer's favor, with the employee being most liable to pay for damages.
These doctrines have had a huge impact on our contentious culture in recent years. Plaintiffs
seeking significant changes have a slim chance of succeeding. The courts do not agree with the
inexcusable rationale behind this guideline, and they usually want to avoid implementing it.
There are many ways to get around the fellow servant law nowadays. A claimant might find an
upturn as a result of an employer's carelessness in hiring an associate employee, or a claimant
might be harmed by a higher employee behaving beyond their jurisdiction in managing a lower
employee.

According to certain publications, the principal and his or her agent are also responsible for any
vicarious actions performed by the agent when operating within the limits of their jurisdiction.
This may be in relation to the principal being held responsible for the vicarious actions of an
agent who was authorized to act under the theory. As a result, many philosophers believe that
the theory should be held responsible for all actions performed after making an explicit
authority representation to the agent. This investigation also focuses on an employer
association's contract. As a result, where the principal is responsible for tort actions committed
by the agent when operating within its means. If an argument is made on behalf of the principal
and under the obvious jurisdiction of the agent, the effect is responsibility. Surprisingly, some
scholars believe that the principal is held accountable not because of the tort, but because of
the principal's obligation. They discovered that the principal is responsible as principal in the
agency partnership, not the tortuous act. Despite the fact that the agent is engaged in the
transaction of accessing the deal, the principal is not liable for the tortuous act because the
contract was not entered personally. However, this has the drawback of implying that the
theory is not responsible for the agent's behavior. Theorists have discovered immunity in cases
where tortious activity is related to a contract agreement.
Finally, what is clear is that the transparency, responsibility, benefits, and remedies came from
the organization organization, which originated in tort law. As it is established that the principal
represents to the third party that the agent is permitted to carry on the dealing, and the third
party is compelled on the basis of that representation, the principal is bound; this doctrine now
underpins vicarious responsibility so that it binds the principle in that he will be held liable.
Lloyd v Grace, Smith and Co (1912) holds that vicarious liability would extend to acts of
deception committed when acting under the powers of obvious authority in the work context.
There was also a case of bribery in Dubai Aluminium Company Limited v. Salaam (2002). This
matter was brought before the House of Lords. There was no question that Dubai Aluminium
transacted with Mr Amhurst in reliance on some apparent authority that could have existed. As
a result, the judges did not feel compelled to consider the vicarious liability debate.
Furthermore, there was plenty of dishonesty and proof that the defendant was behaving for his
own benefit rather than the benefit of the corporations when it came to vicarious liability in the
lawsuit. It was, however, not beyond the control of the jurisdiction. This demonstrates that in
some fields of agency law, vicarious responsibility and apparent authority intersect. According
to the publications, the Atiyah principle still supports the principal's liability for the agent's
vicarious actions committed while acting in the capacity of their jurisdiction, despite the fact
that other scholars, such as Fleming, find contradictions in this theory. The principal is not liable
if the third party relies on a claim made by an agent working on behalf of the principal, unless it
was fair for the third party to believe that the agent had an obligation to act on behalf of the
principle. This is analogous to vicarious liability, in which one party bears responsibility for the
actions of another. The different types of estoppel can be seen to be similar to tort law. For
example, in ordinary instances of legal reactions to declarations, commitments, or assurances,
they emerge to some degree from various ethical standards, even though they do not originate
from the contractual form of promises. As a result, evident authority has evolved to the point
that it can now be seen as promoting the issue of tort law; possibly, in the near future, there
will be a legal amendment that will combine the two doctrines.