Professional Documents
Culture Documents
Law:
What is an Agency?
A consensual relationship created by contract or by law where one party, the principal, grants
authority for another party, the agent, to act on behalf of and under the control of the principal to
deal with a third party. An agency relationship is one where a person or organization acts on
behalf of another person or persons, putting their clients' interest ahead of their own, with a duty
to preserve good faith and trust, and the actions and words of an agent exchanged with a third
party bind the principal (fiduciary in nature). An agreement creating an agency relationship may
be express or implied, and both the agent and principal may be either an individual or an entity,
such as a corporation or partnership. The law of agency allows one person to employ another to
do her or his work, sell her or his goods as if the employer were present and taking action in
person. The principal may authorize the agent to perform a variety of tasks or may restrict the
agent to specific functions, but regardless of the authority given to the agent, the agent represents
the principal and is subject to the principal's control. More important, the principal is liable for
the consequences of acts that the agent has been directed to perform.
Types of Authority:
Express actual Authority
Express actual authority is the authority that the principal has expressly given to the agent
whether or not orally or in writing.
Implied actual Authority
Implied actual Authority is the authority of an agent to do acts which are reasonably incidental to
and necessary for the effective performance of his/her duties. The content of implied authority
depends on the facts of each case. Implied authority is not specifically expressed or defined in
writing.
Usual Authority
Usual Authority refers more specifically to agents who practice a particular trade, business or
profession and are normally authorized to do everything which is usually or ordinarily done in
such a trade business or profession.
Agency of Necessity
Agency of Necessity is the relationship of two parties that happens with one party making
decisions for another. It arises during an emergency and will require a decision to be made by the
second party for the first party. Here the second party is the agent and the first party is the
principal. The agent might be required to make a decision which prevents the principal from a
loss. In these times the agent should act under his own discretion rather than being confined by
authority. When the duty is performed by the person acting on behalf of another person apart
from the duties of the contract to prevent any losses that can’t be rectified. Those relationships
are identified by the courts. There are four requirements which must be met to create an agency
of necessity:
1. Agent’s actions must have been reasonable and prudent in the circumstances.
2. There must have been some necessity or emergency to compel the Agent to act.
3. The agent must be able to show that he was unable to obtain instructions from the
Principal.
4. The agent must satisfy the court that he acted in a bona fide manner in the interest of the
Principal.
Agency by ratification
Agency by ratification arises when the principal ratifies which means he/she approves and acts
on an act which has already been done in his name and on his behalf by the agent who in fact,
had no actual authority whether express or implied to act on the principal's behalf when the act
was done.
Duties of Agent to Principal
The agent owes the principal duties in two categories: the fiduciary duty and a set of general
duties imposed by agency law. The duty to act in the best interests of the principal requires the
agent to use his due diligence and skill to negotiate terms of a transaction on behalf of his
principal with a third party to the greatest advantage of his principal in the circumstances.
Analysis:
In advising Mr. Bryan it is important to consider the authority of Vanessa and whether in
entering into the agreement with Mr. Bryan she was acting as an agent with authority to purchase
the plants.
Vanessa has the authority to purchase the plants for a value not exceeding $10,000 and should
the value exceed that amount she must seek the approval of Mr. Bryan. This authority expressly
states the extent of Vanessa’s authority and what should happen in the event purchases exceed a
certain amount. Vanessa ordered plants worth $25,000 which is above the amount stated by Mr.
Bryan and this amount should be finalized by him which it wasn’t. Vanessa did not have implied
authority to reply as what is necessary for her to execute her authority is to get Mr. Bryan’s
approval. Furthermore, Vanessa also ordered 150 orchids at $100 each for herself. Her intention
was to sell these plants to her friend, the owner of Grand Central Plants at $125 each. Vanessa
intended to pocket the profit. Vanessa had absolutely no Express authority to do so and this was
not communicated with Mr. Bryan. Vanessa has to prove that she could not communicate with
her principal, that the acts she performed was sensible and reasonable actions and she acted
genuinely in light of a legitimate concern for the principal and moreover there probably been
some need or emergency to force Vanessa to act. Mr. Bryan isn't under any commitment to ratify
the actions of Vanessa and he can conclude that given the facts she acted outside her authority
without endeavors to reach him, not to ratify her acts. In light of the facts introduced Vanessa
didn't take these steps and would be ineffective in demonstrating these components. Lastly,
presuming that she didn't have the authority to represent Mr. Bryan on this exchange.
Conclusion:
Mr. Bryan isn't obligated to pay for the merchandise and not bound by the contract made by
Vanessa. Vanessa surpassed her authority without assent of the Principal.
Question 2:
Issue:
Whether or not Salina Grande can bring an action against the Hotel to recover the money lost
and damages to herself and her property.
Law:
What is a contract?
A contract is a written or verbal agreement between two or more parties, who have the legal
capacity, to perform legal obligations that are not opposed to the law or public policy. A
contract must have these essential elements: an offer, an acceptance, a valued consideration, a
promise to perform and intention to create legal relations.
Express terms
Express terms are those terms that are contained in an agreement and are expressed by the parties
to an agreement, whether orally or in writing. If an issue arises out of a written contract there will
be little to no difficulty in determining the problematic term. Express terms are the conditions
proposed by the people who are making the contract. They are purely out of the interest of both
the parties and there is no compulsion to add them in the contract. These terms are used to satisfy
the needs of the parties and are beneficial to the parties.
Implied Terms
Implied terms are words or provisions that a court assumes were intended to be included in a
contract. This means that the terms aren't expressly stated in the contract. In a business contract,
it's usually not possible to cover every detail. A court will often assume that some contract terms
are implied. A term may be implied in a contract on the basis of industry custom and usage.
There are 4 essential elements necessary to establish a valid custom:
1. It must be immemorial.
2. It must be reasonable.
3. It must be certain in its terms and in respect of both the locality where it is alleged to
obtain the persons whom it is alleged to affect.
4. It must have contained as of right and without interruption since its immemorial origin.
Representation
A representation is a statement of fact made by one party which induces the other to enter into
the contract. If it turns out to be incorrect the innocent party may sue for misrepresentation.
Conditions
The conditions are the actions or steps that one or both parties will do to fulfill their side of the
contract. A breach of condition will entitle the injured party to terminate the contract and claim
damages. The injured party may also choose to go on with the contract, despite the breach, and
recover damages instead. The conditions are a requirement based on the contract agreement.
There are two types of conditions:
Expressed Condition: The conditions which are clearly defined and agreed upon by the parties
while entering into the contract.
Implied Condition: The conditions which are not expressly provided, but as per law, some
conditions are supposed to be present at the time making the contract.
Warranties
A warranty is defined as a promise from the seller to the buyer that the product he has bought
will be either repaired or replaced if any problem occurs within a specified time period. It is
generally expressed when the goods are sold. It makes the seller liable to the buyer. There are
the following warranties required by Uniform Commercial Codes:
1. Expressed warranty: It is a warranty that is clearly stated at the time when the product is sold
to the buyer. It is stated in a clear and precise manner. For example, the seller says he will repair
or replace the machine if any problem arises within 2 years of the sales.
2. Implied warranty: It is not stated by the seller to the buyer but is implied in nature. It can be
illustrated as an expectation of the buyer.
Exemption Clauses
Exemption clause are not explicitly written or spoken but put into the contract by legislation it
limits the liability of one of the parties. It is a statement, promise, or representation made after
the contract has been formed. It is a clause that specifies the amount of damages recoverable by
one party if the other party breaches the contract. A party relying on an exemption clause must
demonstrate that the clause is incorporated into the contract and that it provides protection
against the consequences of the breach of contract for which he is accused. Unfair Contract
Terms Act Ch. 82:37 Section 5
(1) A person cannot by reference to any contract term or to a notice given to persons generally
or to particular persons exclude or restrict his liability for death or personal injury resulting from
negligence.
(2) In the case of other loss or damage, a person cannot so exclude or restrict his liability for
negligence except in so far as the term or notice satisfies the requirement of reasonableness.
(3) Where a contract term or notice purports to exclude or restrict liability for negligence a
person’s agreement to or awareness of it is not of itself to be taken as indicating his voluntary
acceptance of any risk.
Analysis:
In order to advise Salina it is important to consider whether or not the hotel is liable for any
damages to self or property.
When she arrived at the Hotel, Five Stars, her room was not ready so she decided to take a tour
of the island while awaiting to check in. Her luggage was taken to the coatroom by the Dan, the
Bellboy and she was given a cloakroom ticket, which she stuffed into her pocket without
reading. The back of the cloakroom ticket read ‘All items left at owner’s risk.’ This is an
expressed term stating that if anyone leaves their belongings they are doing so at risk of losing or
damaging them. When Salina Grande returned to the hotel and collected her bags she noticed
that one of the lock was broken and her suitcase, damaged. As Salina proceeded to her bedroom
she observed a large notice next to the door to her room which stated: ‘Five star accepts no
responsibility for loss of property or injury to persons, howsoever caused’. This is an exemption
clause stating that the hotel holds no liability towards any injuries to persons or property. On her
way to dinner Salina slipped on the tiles in the corridor which was wet, she sprained her ankle
and bruised her hands. Her expensive Prada dress was also ripped. Upon returning to the hotel
after visiting the local hospital for treatment she realized that her suitcase had been tampered
with and her diamond earrings worth $100,000 US was missing. Salina left her belongings at her
own risk, the hotel clearly stated in the term ‘All items left at owner’s risk.’ Thus, due to her
negligence, the hotel has no responsibility towards her luggage being damaged and chain being
stolen. In regards to her spraining her ankle, the hotel exempted themselves through the clause
‘Five star accepts no responsibility for loss of property or injury to persons, howsoever caused’.
Even though a wet floor sign could’ve been placed there was always that clause.
Conclusion
Salina can not take any actions against the hotel because the hotel clearly stated in the terms and
clauses that they were not liable for any loss or damage of property and self.
Question 3:
Crime: Alleged Fraud and Money Laundering
Crime
An act committed in violation of law where the consequence of conviction by a court is
punishment, especially where the punishment is a serious one such as imprisonment.
Actus Reus
Actus reus is the actual action associated with the crime. Actus Reus in law is defined as an
element of criminal responsibility. It may further be stated as a wrongful act or omission that
constitutes the physical component of a crime. The Actus Reus of a crime may be in various
forms and, in some instances, there need not be an act.
Mens Rea
Mens Rea is the state of mind that accompanied the action. This is the part of the offense that
refers to the defendant's mental state or a guilty mind. There are three steps to determine what
mens rea standard is required, interpret criteria of mens rea elements, ask whether the defendant
acted with the required mens rea.