Tutorial 10 Agency

1. Describe the FIVE (5) ways in which an agency can be created.

(a) Agency by Express Appointment : whereby the principal appoints

the agent either in writing or by oral

(b) Agency by Implied Appointment : when a person by his words or

conduct holds out another person as having authority to act for him

(c) Agency by Ratification : can arise in 2 situations, i.e. agent has

exceeded his authority or a person who has no authority to act for the
P has acted as if he has the authority and the principle can either reject
the contract or accept the contract. If P accepts the contract he is said
to ratify the agency.

(d) Agency by Necessity : the law may confer authority on one person
to act as agent for another without regard to the consent of the
principle.

(e) Agency by Estoppel or ‘holding out’ : The principal may, by

words or conduct, create an inference that an agent has authority to act
on behalf of the principal even though no actual authority exists in
fact; and if a third party relies on it to his detriment, the principal will
be estopped from denying the agent’s authority.

2. Explain the FIVE (5) duties owed by an agent to his principal.

-To obey Principal’s instruction.

-In the absence of instructions from the principal, to act according to

the customs.

-To exercise care and diligence in carrying out his work.

-To render proper accounts when required.

-To pay all sums received to the Principal on his behalf.

-To communicate with the Principal with all reasonable diligence.

-To prevent his own interest conflicting with his duty.

-Not to make any secret profit out of the performance of his duty.
-Not to disclose confidential information or document entrusted to A
by Principal

-Not to delegate his authority to other persons.

3. Explain the duties owed by the principal to his agent. (Pg 9 上

面）

4. Explain the remedies available to a principal in the event the agent breaches
his duties. / An agent who acted beyond the scope of his or her actual authority
may be in breach of contract. Discuss the legal effects (consequences) for
breaching the principal- agent relationship with relevant examples

-Principal may repudiate the contract

-Principal may recover the bribe

-Principal may refuse to pay the commission

-Principal may dismiss the agent

5. How can an agency be terminated? (Pg 9 )

Termination by Act of Parties: (3)

Termination by Operation of Law: (6)

6. Discuss the conditions that need to be satisfied to create the following types of
agency:

(a) agency by necessity

Impossible for the agent to get P’s instructions.

A’s action is necessary to prevent loss to the P with respect to the goods.

A of necessity has acted in good faith.

(b) agency by ratification

The P must have contractual capacity at the time when the contract is made and at the
time of ratification.

The ratification must be made within a reasonable time.

7. P appoints A as her agent, instructing A to buy a lady's watch on her behalf
costing not more than RM5,000. A saw a RM10,000 ladies watch which P had
always wanted, on sale for RM6,000 and bought the watch on behalf of P costing
RM6k. P is very upset and refuses to pay for the watch. Advise A as to whether P
can refuse to pay for the watch.

• On the fact, P appoints A as her agent, instructing A to buy a lady's watch on her
behalf costing not more than RM5,000. A bought the watch at RM6000 on behalf of P.

• Outline s149.

• According to s149, P can either reject or accept the contract.

• If P accept, P is bound to pay RM6000. If P reject, A is responsible to pay the

RM6000.

• In conclusion, A is advised that P has a right to refuse to pay which means P is not
ratifying the contract. (OR OTHER CONCLUSION IS ACCEPTABLE!)

8. (a) What are the various forms of authority of an agent? (pg

5)

Actual Authority and Apparent Authority

(b) Describe the ways in which an agency is terminated. (Pg6)

9.  State any FOUR (4) ways that agency can be created.
 by express appointment by the principal
 by implied appointment by the principal
 by necessity
 by ratification by the principal
 by estoppel
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