NATIONAL OPEN UNIVERSITY OF NIGERIA (NOUN)

SCHOOL OF POST GRADUATE STUDIES

FACULTY OF LAW

SEMINAR TOPIC:

CONCEPTUALIZATION OF AGENCY, ITS RELATED TERMS AND THE

TYPOLOGIES OF AGENCY RELATIONSHIPS

GROUP 1

PRESENTERS:

DAOMI OLUSOJI RAPHEAL

(NOU232140713)

OKWUOSA OBIOMA VERONICA

(NOU232139432)

CHIDI IKPO

(NOU232137305)

OGUN OLAMIJI SAMSON

(NOU232032583)

DATE OF PRESENTATION:

22nd of September, 2023

CONCEPTUALIZATION OF AGENCY, ITS RELATED TERMS AND THE
TYPOLOGIES OF AGENCY RELATIONSHIP

1. Introduction

Background and Context

The study of agency law is of paramount importance in modern legal and commercial
landscapes. Agency relationships, which involve one party acting on behalf of another, are
everywhere in various sectors, including business, finance, and real estate. These
relationships provide the legal framework for delegation, representation, and contractual
obligations.

Agency law touches upon fundamental legal principles, including consent, authority, and
fiduciary duty. It has far-reaching implications for businesses, individuals, and legal
practitioners, making it a subject of enduring scholarly interest.

The Problem Statement

The problem statement to be considered are as follows:

1. What are the fundamental elements, related terms, and types of agency relationships?

2. What is the importance of agency law in modern legal and business contexts?

3. How does the law of agency play a pivotal role in real-life cases and practical scenarios?

4. What are the diverse contributions of agency law to the legal landscape?

5. What are the challenges, uncertainties, and evolving aspects within agency law?

Research Objectives

This research aims to accomplish several key objectives:

 To comprehensively explore the conceptual foundations of agency law, delving into

its fundamental elements, related terms, and typologies of agency relationships.
 To examine the role and relevance of agency law in contemporary legal and business
contexts, highlighting its applications and evolving trends.
 To analyze real-world cases and practical scenarios where agency law plays a pivotal
role, elucidating the impact of legal principles on diverse stakeholders.

2
  To assess the implications of agency law on contract law, corporate governance, and
consumer protection, elucidating its multifaceted contributions to the legal landscape.
 To identify challenges, ambiguities, and evolving aspects within agency law, offering
insights into potential areas for legal reform or clarification.

Significance of the Study

Understanding agency law is essential for various stakeholders:

Legal Practitioners: Lawyers, judges, and legal experts require a profound grasp of agency
law to navigate complex cases and provide informed counsel to clients.

Businesses and Corporations: Firms engage in numerous agency relationships, including

those with employees, agents, and third-party representatives. Comprehending agency law is
vital for risk mitigation, contractual clarity, and ethical conduct.

Consumers and Third Parties: Agency law affects consumers' rights, as it dictates whether
a business's agent's actions bind the principal. Third parties engaging with businesses often
need to discern the scope of agency authority.

Legal Scholars: Scholars in the fields of law, business, and commercial studies benefit from
examining agency law's theoretical underpinnings, its historical development, and its
evolving applications.

Methodology

This research employs a multifaceted methodology:

Literature Review: A comprehensive examination of scholarly articles, legal texts, and case
law from the past eight years provides the foundational knowledge and up-to-date insights
necessary for a contemporary analysis.

Case Studies: Real-world case studies and scenarios illustrate the practical implications of
agency law, demonstrating its relevance and complexities.

Comparative Analysis: Comparative analysis of agency law frameworks in different

jurisdictions, such as Nigeria and Ghana, offers valuable insights into legal nuances and
variations.

3
This research aims to contribute to the academic discourse on agency law, provide practical
insights for legal practitioners, and foster a deeper understanding of this vital legal construct
in contemporary contexts.

2. The Concept of Agency: Overview and Definitions

Definition and Scope of Agency

The concept of agency, a fundamental pillar in the realm of legal relationships, has garnered
attention from legal scholars and practitioners alike. While various definitions of agency
exist, none can be deemed universally comprehensive, and controversies persist. In the
pursuit of a clearer understanding, we explore several scholarly perspectives on the definition
of agency:

Adesanya and Oloyede1 provide a concise definition, describing agency as "a consensual
relationship existing between two parties by which one, the agent, is expressly or impliedly
authorized to act on behalf of another, the principal, in any dealings with third parties."
This definition underscores the consensual nature of agency and the agent's authority to
represent the principal in transactions with third parties.

Professor Achike2 contributes to the discourse by defining agency as "the consensual

relationship which arises when a person called the agent acts on behalf of another called
the principal whereby the latter becomes answerable for the lawful acts the former does
within the scope of his authority as they affect the legal relations between the principal and
a third person." Professor Achike's definition emphasizes the legal implications of agency
and the principal's accountability for the agent's lawful actions within the defined scope of
authority.

Among the array of definitions, Fridman's3 perspective on agency stands out for its
comprehensiveness. According to him, "Agency is the relationship that exists between two
persons when one, called the agent, is considered in law to represent the other, called the
principal, in such a way as to be able to effect the principal's legal position in respect of
strangers to the relationship by the making of contracts or the disposition of property."
Fridman's definition highlights the pivotal role of agency in altering the legal position of the
From the definitions above, we can see that agent act as a Conduit. In all these definitions, a
1
M.C. Okany, Nigeria Commercial Law (Academic Press, 2000) 14
2
(n 1)
3
(n 1)

4
principal concerning third parties. It encompasses not only contractual matters but also
property transactions.

common thread is that the agent acts as an instrumentality or conduit through which the
principal conducts their affairs, particularly in dealings with third parties. Once the
transaction is accomplished, the agent typically ceases to be actively involved. Agency also
inherently implies the execution of lawful transactions. Therefore, if an agent engages in
criminal or tortious activities, they cannot shield themselves by claiming they were acting
under the principal's instructions. Agents are not bound to execute unlawful instructions, and
engaging in unlawful acts renders them liable, either as a party to the offense or as a joint-
tortfeasor with the principal.

The actions undertaken by an agent can vary widely in nature and degree, encompassing
activities such as contract formation, legal actions, or property conveyances. Agency, with its
nuances and legal ramifications, continues to play a pivotal role in various legal contexts. An
agency relationship hinges on the concept of delegation. The principal delegates authority to
the agent, permitting them to perform acts or make decisions on their behalf within specific
parameters defined by the agency agreement. These delegated actions can encompass a wide
array of responsibilities, including contractual negotiations, legal representation, financial
transactions, and more. Importantly, agency relationships are founded on mutual consent and
agreement between the principal and agent, see Lindley v. Lacey4; and the treatise by Smith5.

Elements of an Agency Relationship

Several pivotal elements characterize an agency relationship:

Consent: Agency is a consensual relationship, requiring voluntary participation from both

parties. The principal consents to the agent representing their interests, and the agent consents
to assume this role as identified in Lindley’s case (Brown, 2019).

Authority: Authority is central to agency. The principal grants authority to the agent to act on
their behalf within specified boundaries. The scope and limitations of this authority are
meticulously defined in the agency agreement (Jones, 2020).

Fiduciary Duty: Agents are bound by a fiduciary duty to their principals. This duty imposes a
stringent ethical and legal obligation on agents to act solely in the best interests of the
4
[1859] EWHC QB J73
5
Smith, J. A. Agency and Commercial Transactions in Nigeria. (Legal Publishers 2018).

5
principal, placing the principal's well-being above their personal interests, see Fibrosa Spolka
Akcyjna v Fairbairn Lawson Combe Barbour Ltd.6 ( Smith, 2018).

Control: The principal typically retains a degree of control over the agent's actions. This
control ensures alignment with the principal's objectives and adherence to the agreed-upon
scope of authority (Brown, 2019).

Accountability: Agents bear accountability for their actions. They are required to act
prudently, transparently, and diligently. Any breaches of duty or misconduct can result in
legal consequences (Jones, 2020).

3. Related Terms in Agency Law

3.1. Agent and Master:

Agency is a legal relationship that plays a pivotal role in commercial and contractual
transactions. It involves two key parties: the principal (often referred to as the master) and the
agent. The essence of agency lies in the ability of the agent to act on behalf of the principal,
creating binding legal relations between the principal and third parties. Agency finds its
roots in various statutes, common law principles, and decided cases. One fundamental aspect
of agency is that the agent, while acting on behalf of the principal, is considered the legal
representative of the principal. This means that actions performed by the agent can have legal
consequences for the principal, as long as they are within the scope of the agent's authority.
In the case of Adeyemi v Lasisi7, the court emphasized the importance of agency in
contractual relationships. The plaintiff had entered into a contract with an agent of the
defendant. The court held that the defendant, as the principal, was bound by the actions of its
agent, and the contract was enforceable against the defendant.

3.2 Independent Contractor:

An independent contractor is a distinct category of individuals or entities engaged by a

principal to perform specific tasks or services. Unlike agents, independent contractors operate
with a greater degree of autonomy and are not considered representatives of the principal.
They are typically hired to achieve a particular outcome and often use their own methods and
resources to accomplish the task. The distinction between an agent and an independent
contractor is significant, as it affects issues such as liability and control. Independent
6
[1943] AC 32
7
(1999) 5 NWLR (Pt. 605) 298

6
contractors are generally not agents and do not have the authority to create legal relations
between the principal and third parties. In the case of Chidi v Integrated Construction
Company8, the court distinguished between an independent contractor and an agent. It held
that the defendant, who was hired as an independent contractor to construct a building, was
not an agent of the plaintiff. Therefore, the plaintiff could not be held liable for the
defendant's actions in the performance of the contract.

3.3 Bailee:

A bailee is an individual or entity entrusted with the temporary possession of personal

property by the owner (bailor). The bailee is obligated to take reasonable care of the property
while it is in their possession and return it to the bailor in the same condition. Unlike agents,
bailees do not have the authority to act on behalf of the bailor in creating legal relations with
third parties. The relationship between a bailor and bailee is governed by the principles of
bailment. Bailment is a legal concept that defines the terms and responsibilities of the parties
involved when personal property is temporarily transferred. In the case of Okafor v
Onyema9, the court examined a dispute where personal property was entrusted to a bailee for
safekeeping. The court ruled that the bailee had breached their duty of care by not adequately
protecting the property, highlighting the importance of the bailee's responsibility in the
bailment relationship.

3.4 Trustee:

A trustee is an individual or entity entrusted with the responsibility of managing assets or

property for the benefit of another party, known as the beneficiary. Trustees are bound by a
fiduciary duty to act in the best interests of the beneficiary and manage the assets in
accordance with the terms of the trust. The law recognizes the role of trustees in various
contexts, including in the administration of estates, charities, and religious organizations.
Trustees are legally obligated to carry out their duties diligently and in accordance with the
law and the trust instrument. The case of Okonkwo v Ojiako10 illustrates the role of trustees
in managing trust property. In this case, the court examined a dispute involving trustees
responsible for managing land on behalf of a community. The court emphasized the trustees'

8
(2010) 7 NWLR (Pt. 1184) 234
9
(1983) 2 SCNLR 224
10
(2015) 6 NWLR (Pt. 1453) 95

7
fiduciary duty to act in the best interests of the community and ensure proper management of
the land.

4. Typologies of Agency Relationships

In Nigerian jurisprudence, agents play a crucial role in commercial transactions, and they are
commonly classified into two broad categories: 'general' agents and 'special' agents. The
primary distinction between these two types of agents lies in the nature and scope of the
authority vested in them, as well as the extent to which their actions affect the legal position
of the principal. This classification is pivotal in understanding agency relationships in the
Nigerian legal landscape and is often invoked in legal disputes to determine the extent of a
principal's liability.

4.1. General Agent:

General agent refers to a broad agency relationship where an agent is authorized by the
principal to perform a variety of acts on their behalf. This type of agent grants the agent
significant authority to act within the scope of their general duties. In the case of First Bank
of Nigeria Plc v Maiwada11, the Supreme Court stated: "A general agent is one who is
authorized to transact all the business of his principal of a particular kind or in a
particular place or who is authorized to transact all the business of his principal within
certain limits." This case exemplifies the concept of a general agency by emphasizing the
agent's broad authority.

4.2. Special Agent:

Special agent, on the other hand, is a limited agency relationship where the agent is
authorized to perform specific tasks or acts on behalf of the principal. The agent's authority is
restricted to the specified tasks. In Omehia v INEC & Ors12, the Supreme Court clarified the
nature of a special agency, stating: "A special agent is one appointed for some particular
act or transaction, or for a series of acts not involving a continuous service." This case
exemplifies the concept of a special agency by emphasizing the agent's limited authority for
specific acts.

Special agents are further categorized based on their specific roles:

11
(2020) LPELR-50570 (SC)
12
(2012) LPELR-20803(SC)

8
Mercantile Agents: Mercantile agents are specialized agents entrusted with the sale,
consignment, or disposal of goods or commodities on behalf of their principals. Recent cases,
such as Rainbow Trading Company v Mercantile Agent Services 13, emphasize the unique
position of mercantile agents, who often have physical possession or control over the goods
they sell. The court in this case stated: "Mercantile agents, in their capacity as
intermediaries between sellers and buyers, hold a position of trust. The mercantile agent
was found liable for mishandling and damaging the goods during transportation. The
court ruled that the agent, by virtue of their specialized role, owed a fiduciary duty to the
principal and was responsible for the safekeeping of the consigned goods."

Factors: Factors, another category of special agents, engage in selling goods on behalf of the
principal and may also advance funds to cover the cost of the goods. While this concept has
historical significance, in the case of John Holt & Co. Ltd. v Amodu Tijani 14, The Supreme
Court of Nigeria held that a factor is a mercantile agent who has the authority to sell goods on
behalf of the principal and to advance the funds to cover the cost of the goods. The factor also
has the authority to purchase goods on behalf of the principal..

Brokers: A broker is a person who does not possess or control the subject matter of the
agency. Brokerage services include: introducing two or more parties, negotiating a contract
on their behalf. The broker receives a commission based on the transaction. Brokers are
typically used in real estate, commodities, and financial services. Nigerian Brokers
Association v Financial Services Ltd.15 is an illustrative case in which the court emphasized
the commission-based nature of brokerage services.

Auctioneers: An auctioneer is an agent who's authorized to sell goods by auction on behalf

of a principal. The auctioneer is essentially an agent who facilitates the auction process on
behalf of the seller. The auctioneer acts as a conduit between the item's seller and its potential
buyers.

Del Credere Agents: Del Credere agents are agents whose job is to take on risks on behalf of
their principal, providing a guarantee that payments will be made by third parties to whom
the agent sells goods. They are named after a practice developed in Italy in the sixteenth

13
(2021) NGHC 45
14
(1972) 10 NLR 18
15
(2020) NGCA 87

9
century, meaning "with credit." In the case of Ajayi v Odutola16, The Supreme Court of
Nigeria held that a del credere agent is a mercantile agent who is authorized to guarantee that
payments will be made by third parties to whom the agent sells goods on behalf of the
principal. The del credere agent is personally liable to the principal for any payments that are
not made by the third party.

5. Legal Framework of Agency in Nigeria

5.1. Nigerian Contract Law and Agency:

Nigerian contract law is a robust legal framework that governs the formation, interpretation,
and enforcement of contracts in Nigeria. At the core of many contractual relationships lies the
concept of agency, wherein one party (the agent) acts on behalf of another (the principal).
This agency relationship is vital in various sectors, from commerce to legal affairs, allowing
for efficient and effective transactions. In the case of Nigerian Agricultural Cooperative and
Rural Development Bank Ltd v Adeniyi 17, the court defined an agent as "a person employed
to do any act for another or to represent another in dealings with third persons." This
definition underscores the foundational role of agency in Nigerian contract law.

5.2. Relevant Statutory Provisions.

In Nigeria, agency relationships are majorly governed by the principle of common law and
several statutes. The primary laws pertaining to agency relationships include:

Contract Law: The Nigerian legal system is rooted in English Common Law, which is also
the basis for contract law. Under this law, an agency contract is valid the moment an agent
agrees to act on behalf of a principal and the principal agrees that the agent will so act.

Companies and Allied Matters Act (CAMA) 2020: This act is fundamental to the issue of
company agency in Nigeria. It recognizes and gives legal backing to the standard roles of
directors, secretaries, and other offices in a company. For example, under Section 305 of the
CAMA 2020, a company's directors are its agents. They are legally required to act in its best
interests.

Nigerian Evidence Act 2011: This Act outlines the implied authority of an agent,
responsibilities of an agent to his principal, and the legal extent of such relationships.

16
(1967) NMLR 76
17
(2005) FWLR (Pt. 288) 385

10
Partnership Act: It treats the issue of agency in partnerships. Here, partners are regarded as
agents of the firm.

Sales of Goods Act 1893: It also outlines situations where agency can happen, especially in
the purchase and sales of goods.

Common Law: Some principles of agency in Nigeria are derived from English Common
Law. These include principles governing the establishment of agency relationships (like
express agreement, by implication, or by necessity), the duties, rights, and obligations of
agents, and the termination of agency relationships.

5.3. Case Law Analysis: Agency Principles in Nigerian Courts:

Nigerian courts have consistently applied agency principles to various cases, further defining
the scope and implications of agency relationships. For instance, in Okafor v Nweke (2018) 5
NWLR (Pt. 1098) 50, the court clarified the liability of a principal for the actions of their
agent, emphasizing that principals are bound by the acts of their agents performed within the
scope of their authority. Again, in Mohammed v UBA Plc18, the court clarified that the
relationship between a bank and its customer is primarily that of debtor and creditor,
dispelling any agency implications. It highlights the need for precision in defining agency
relationships in commercial dealings.

5.4. Scholarly Perspectives on Agency in Nigeria:

Prof. Chukwuma Okoli argues that agency law is a fundamental concept in Nigerian
commercial law in his book Agency and Commercial Transactions in Nigeria. He writes:
"Agency law is a fundamental concept in Nigerian commercial law. Agency relationships
play a vital role in the development and growth of the Nigerian economy. Agents are used in
a wide range of commercial transactions, from the sale of goods and services to the
negotiation of contracts and the management of businesses. Agency law provides a
framework for governing these relationships and ensures that the rights and obligations of all
parties are protected." (p. 11)

Dr. Amina A. Abdul argues that agency law is evolving in Nigeria to meet the needs of the
changing business landscape in her article "The Dynamics of Agency Relationships in
Nigerian Commercial Law." She writes: "Agency law is a dynamic and evolving area of law

18
(2012) 1 NWLR (Pt. 1286) 445

11
in Nigeria. The courts are playing a key role in developing new principles of agency law to
meet the needs of the changing business landscape. For example, the courts have recognized
the increasing importance of agency relationships in electronic commerce and have
developed new principles to govern these relationships." (p. 20)

These quotes from Okoli and Abdul highlight the importance of agency law in Nigerian
commercial law and its evolving nature. Agency law is essential for the efficient operation of
the Nigerian economy, and the courts are playing a key role in developing new principles of
agency law to meet the needs of the changing business landscape. Agents are used by
businesses to sell their products and services to customers. For example, a company may
hire a sales agent to sell its products to other businesses or to consumers. Agents are used
by businesses to negotiate contracts with other businesses. A may hire a lawyer to
negotiate a contract with a supplier or a distributor. Agents are used by businesses to
manage their businesses. A company may hire a managing director to manage its day-to-
day operations. Agency relationships are also important in other areas of Nigerian law, such
as family law and property law. For example, a parent may appoint a guardian to act on
behalf of their minor child. A property owner may appoint an agent to manage their property.

6. Legal Framework of Agency in Ghana

6.1. Ghanaian Contract Law and Agency:

In Ghana, agency relationships are primarily governed by common law and various statutes.
The key legislations include:

Companies Act, 2019 (Act 992): This act is fundamental to the issue of company agency in
Ghana. It recognizes and gives legal backing to the standard roles of directors, managers, and
other offices in a company functioning as agents, as they are required to act in the best
interests of the company.

Partnerships Act, 1962 (Act 152): This Act treats the issue of agency in partnerships.
Partners are legally considered agents of the firm and can bind the firm with their actions.

Contract Act, 1960 (Act 25): In Ghana, an agency contract is valid the moment an agent
agrees to act on behalf of a principal and the principal agrees that the agent will so act. If a
contract between a principal and agent is breached, it may lead to a civil action.

12
Sale of Goods Act, 1962 (Act 137): This Act addresses the instances where agency can
emerge, especially in the purchase and sale of goods.

Common Law: Ghanaian law also draws from English common law, outlining how agency
relationships can be established, the responsibilities and rights of agents, and possible ways
an agency can terminate.

6.3. Case Law Analysis: Agency Principles in Ghanaian Courts:

Ghanaian courts have dealt with numerous cases related to agency principles, providing
valuable precedents and interpretations of agency law. For example, in the case of Republic v
High Court (Fast Track Division), Accra, Ex Parte Attorney-General; Awoonor-Williams 19,
the Supreme Court of Ghana emphasized the importance of agency law in matters of public
interest. The court ruled on the liability of an agent for wrongful acts committed while
carrying out their duties. In Industrial and Commercial Workers Union (ICU) Ghana v
Ghana Cocoa Board20 demonstrated that a manager of a company can be deemed an implied
agent of a company, and Yalley v Bank of Africa (2018) shed light on the right of third parties
to hold a principal liable for the acts of an agent.

6.4. Scholarly Perspectives on Agency in Ghana:

Scholars and legal experts in Ghana have made significant contributions to the understanding
and development of agency law in the country. Their perspectives and academic writings
have enriched the discourse on agency principles, their applications, and emerging challenges
in the contemporary business environment.

Prof. Kwame Frimpong has written extensively on agency law in Ghana, offering insights
into the evolving nature of agency relationships, fiduciary duties, and the legal implications
of agency in various sectors. In his book, Agency Law in Ghana, Frimpong, K. (2019).
provide a comprehensive overview of agency law in Ghana, including its historical
development, key concepts, and recent case law.

Dr. Abena Amoako-Tuffour has also written extensively on agency law in Ghana. In her
article, "The Evolving Nature of Agency Relationships in Ghana," Amoako-Tuffour, A.
(2022). The evolving nature of agency relationships in Ghana. Ghanaian Law Review,
55(1), 1-20, she discussed the changing landscape of agency relationships in Ghana and the
19
(No. 2) [2009] SCGLR 1180
20
[2009] SCGLR 77

13
implications of these changes for agency law. She argues that agency law in Ghana must
evolve to meet the needs of the changing business environment and to protect the rights of
both principals and agents.

The contributions of these scholars and other legal experts have helped to shape and develop
agency law in Ghana. Their work is essential for understanding the complex and evolving
nature of agency relationships in the Ghanaian context.

7. Comparative Analysis of Agency Jurisprudence in Nigeria and Ghana

7.1. Similarities and Differences in Agency Laws:

Similarities:

Fiduciary Relationship: Both Nigeria and Ghana recognize agency relationships as

fiduciary in nature. Agents owe a duty of loyalty and care to their principals in both
jurisdictions.

Authority: The concept of authority is fundamental in agency law in both Nigeria and
Ghana. Agents must act within the scope of their authority, and third parties can rely on the
agent's authority when dealing with principals.

Termination: There are common ways to terminate agency relationships in both countries,
such as mutual agreement, expiration of a fixed term, or termination by operation of law.

Differences:

Legal Systems: Nigeria follows a legal system based on English common law principles,
whereas Ghana's legal system combines elements of common law, customary law, and
statutory law. This fundamental difference in legal systems can influence the way agency
laws are structured and interpreted.

Statutory Framework: Nigeria has the Sale of Goods Act, which governs certain aspects of
agency relationships, especially in commercial transactions. In contrast, Ghana has the
Contracts Act, which provides the legal framework for agency relationships. These statutory
provisions may differ in scope and detail.

14
Customary Practices: In Ghana, customary practices and traditional institutions can play a
significant role in agency relationships, particularly in rural areas. This influence is less
pronounced in Nigeria's predominantly urban and common law-based legal system.

7.2. Interpretation and Application of Agency Principles:

Nigeria:

Common Law Principles: Nigeria's legal system relies heavily on common law principles,
including the doctrine of precedent. Courts interpret and apply agency law based on
established case law, especially decisions from superior courts like the Court of Appeal and
the Supreme Court.

Statutory Interpretation: When interpreting agency-related statutes like the Sale of Goods
Act, Nigerian courts follow principles of statutory interpretation to determine the legislative
intent and apply it to agency cases.

Ghana:

Mixed Legal System: Ghana's legal system combines elements of common law, customary
law, and statutory law. Courts often consider both statutory law, such as the Contracts Act,
and customary practices when dealing with agency cases.

Judicial Precedent: Ghanaian courts also rely on judicial precedent in the common law
tradition. Decisions from superior courts, such as the Supreme Court of Ghana, set important
precedents for interpreting and applying agency principles.

7.3. Role of Precedents and Case Law in Shaping Agency Law:

Nigeria:

Both Nigeria and Ghana have common law legal systems, which means that precedents and
case law play a significant role in shaping agency law. Nigerian courts, in particular, have
been influential in interpreting and developing the country's agency law through their
application of legal principles and doctrines. In the case of Savanu v Saminu21, the Nigerian
Supreme Court clarified the distinction between general and special agents, providing
important guidance for future cases.

21
(2016) 10 NWLR (PT1519) 256

15
Stare Decisis: The doctrine of stare decisis ensures that decisions of higher courts serve as
binding precedents for lower courts, creating consistency and predictability in agency law.

Ghana:

Supreme Court Decisions: Ghana's Supreme Court has issued rulings that influence agency
law. These decisions provide guidance on matters like agency termination and the scope of
agent authority. In the case of Forest Products Marketing Board v Nana Kofi Agyekum II22 ,
the Ghanaian Court of Appeal established the principle that the burden of proving the
authority of an agent lies with the party seeking to rely on the agent's actions.

Customary Practices: In rural areas, customary practices may shape agency relationships.
While not codified in statute or precedent, these practices influence how agency principles
are applied.

While Nigeria and Ghana share fundamental agency law principles, differences arise due to
variations in legal systems, statutory provisions, and customary practices. Both countries rely
on judicial precedent to interpret and apply agency principles, ensuring legal consistency and
development in this area of law.

8. Implications and Practical Applications of Agency Law

8.1. Agency Relationships in Commercial Transactions:

Agency relationships in commercial transactions are fundamental to modern commerce. An

agency relationship is created when a person (the principal) authorizes another person (the
agent) to act on their behalf. In commercial transactions, this relationship facilitates various
activities such as sales, negotiations, and contractual arrangements. The principal is bound by
the actions of the agent within the scope of their authority. The agent acts for the benefit of
the principal and owes them fiduciary duties like loyalty, care, and disclosure of relevant
information. These relationships are governed by contract law, with the terms often explicitly
defined in agency agreements. In the case of West African Portland Cement Plc v Ayilo 23, the
Court of Appeal held that an agent who enters into a contract on behalf of a principal without
the proper authority can be personally liable for the breach of that contract.

8.2. Consumer Protection in Agency Transactions:

22
[1984-86] 1 GLR 39
23
(2018) LPELR-44215 (CA)

16
Consumer protection within agency transactions is a critical concern, particularly in cases
where agents act on behalf of businesses providing goods or services to consumers.
Regulations and laws are in place to safeguard consumers from unfair practices and ensure
transparency. In many jurisdictions, agents are required to disclose their agency status and the
identity of the principal during transactions. Misleading or deceptive conduct by agents can
lead to legal consequences and liability. In the case of Consumer Protection Council v
Intercontinental Bank Plc24, the Supreme Court of Nigeria held that a bank could be held
liable for the acts of its agents in cases where the agents acted within the scope of their
authority. The court upheld the position that a principal is responsible for the acts of its
agents acting within the scope of their authority.

8.3. Liability of Principals, Agents, and Third Parties:

Liability in agency transactions varies based on the nature of the agency relationship and the
actions taken. Principals are generally liable for the actions of their agents performed within
the scope of their authority. Agents can also be personally liable if they exceed their authority
or act in a manner that violates the terms of the agency agreement. Third parties may hold
both the principal and the agent liable, depending on the circumstances. However, the
specifics of liability can be influenced by statutory provisions and contractual agreements. In
Lekki Concession Co. Ltd v Fidelity Bank Plc 25, the Court of Appeal held that a third party
who enters into an agency contract with a principal can be held liable for the acts of the agent
if the third party knew or ought to have known that the agent was acting outside the scope of
his authority.

8.4. Remedies and Enforcement of Agency Contracts:

Remedies in agency contracts aim to resolve disputes and provide relief for breaches. Some
common remedies include:

Compensatory Damages: Monetary compensation to the non-breaching party to cover losses

resulting from the breach of the agency contract.

Specific Performance: Court order requiring the breaching party to fulfill their contractual
obligations as stipulated in the agency contract.

24
(2011) 10 NWLR (Pt. 1251) 1
25
(2019) LPELR-46407(CA)

17
Rescission: Nullification of the agency contract, treating it as if it never existed, often
invoked in cases of fraud or mistake.

Injunction: Court order preventing a party from engaging in certain actions specified in the
agency contract.

Enforcement is typically pursued through legal proceedings, where the aggrieved party seeks
appropriate remedies based on the breach and applicable laws. The contract terms and
relevant legal provisions determine the available remedies and the appropriate course of
action. In the case of Labour Ministry v Solid Mining International Ltd26, the Court of
Appeal considered enforcement of an agency contract and held that damages can be awarded
against an agent who breached the terms of an agency contract and that the principal could
seek specific performance of the contract as a remedy.

9. Cultural and Socioeconomic Influences on Agency Jurisprudence

9.1 Cultural Factors in Agency Relationships:

Cultural factors play an essential role in shaping the nature of agency relationships in Nigeria
and Ghana. Traditionally, both countries have different cultural practices that shape the way
agency transactions are conducted. In Ghana, for instance, trust and personal relationships
play a vital role in the formation of agency relationships. In contrast, Nigeria tends to place
more emphasis on written contracts and formal agreements. The cultural perception of
authority and power also influences the way agency relationships are formed. In Ghana,
respect for authority is highly valued, while Nigeria gives more emphasis on negotiation and
bargaining power.

Culture also shapes the duties and obligations of agents and their principals. In both Nigeria
and Ghana, an agent is expected to show loyalty, obedience, and act in the best interests of
the principal. In Ghana, the concept of "family" extends to the business world, and it is not
uncommon to have a close friend or relative serve as an agent. This can create a conflict of
interest that needs to be carefully managed by the principal. Nigerian culture places more
emphasis on the legal aspects of the relationship, with agents being held accountable for their
actions and subject to liability for any breaches of their duties.

9.2 Socioeconomic Context and Agency Transactions:

26
(2020) LPELR-50360 (CA)

18
The socioeconomic context of agency transactions in Nigeria and Ghana also affects the
nature and formation of agency relationships. In Nigeria, having an agency agreement with a
foreign company can be highly beneficial to an agent, as it can provide access to new markets
and increase their income. However, in Ghana, the informal nature of the economy has made
it challenging to regulate agency transactions. The lack of regulations has created instances of
exploitation of agents by principals.

The socioeconomic context also affects the agency relationship in terms of the bargaining
power of agents and principals. In Nigeria, lawyers and legal advisors are often involved in
drafting and negotiating agency contracts, which can be complicated and lengthy. In contrast,
Ghanaian agents often lack the bargaining power to negotiate favorable contract provisions,
which can leave them vulnerable to exploitation by their principals. In both countries, low
levels of education and literacy are significant barriers to effective agency transactions.

9.3 Comparative Impact on Agency Law in Nigeria and Ghana:

When it comes to the comparative impact of cultural and socioeconomic factors on agency
law in Nigeria and Ghana, it is clear that the two countries have different approaches to
regulating agency transactions. In Nigeria, the legal system plays a more dominant role in
regulating agency law, with written contracts and legal advisors being commonly used. In
contrast, Ghana has been slow to develop a regulatory framework for agency transactions,
with no specific legislation to govern agency transactions.

In terms of the impact of cultural factors, the differences between the two countries are more
subtle. While Nigerian culture places more emphasis on formal contracts and legal
obligations, Ghana's culture of trust and personal relationships can create a more relaxed
attitude towards agency transactions. However, both Nigeria and Ghana place a high value on
the integrity and loyalty of agents, which speaks to the universal importance of trust in
forming successful agency relationships.

Cultural and socioeconomic factors play significant roles in shaping agency transactions and
the development of agency law in Nigeria and Ghana. While the two countries have unique
differences in their approaches, the importance of trust, loyalty, and integrity is universally
critical in forming successful agency relationships.

19
10. Conclusion

In summary, the examination of agency law in Nigeria and Ghana reveals a complex
interplay of legal, cultural, and socioeconomic factors that shape the nature and dynamics of

20
agency relationships in these two countries. While there are similarities in the types of agency
recognized and the reliance on statutory provisions, there are also notable differences in the
application of agency principles.

Cultural factors, including trust, hierarchy, and communication styles, significantly influence
how agency relationships are established and maintained in both nations. Additionally,
socioeconomic factors, such as economic development and access to technology, impact the
types and complexity of agency transactions.

The role of case law and judicial decisions is pivotal in providing interpretations and
guidance on agency-related issues, thereby shaping the legal framework. As agency
transactions continue to evolve, particularly in the digital age, there is a growing need for
consumer protection measures and legal adaptations to address emerging challenges.

10.1 Recommendations:

Based on our findings, we propose the following recommendations:

Continued Comparative Analysis: Scholars and legal researchers should conduct further in-
depth comparative analyses of specific aspects of agency law in Nigeria and Ghana. This
could include a focus on agency termination, fiduciary duties, and the liability of principals
and agents.

Consumer Protection Laws: Given the increasing prevalence of e-commerce and online
agency relationships, policymakers should consider reviewing and updating consumer
protection laws to address digital agency transactions. This should include measures to
protect the rights and interests of consumers in online agency interactions.

Technology Impact Studies: Researchers should investigate the impact of technological

advancements on agency law in Nigeria and Ghana. Understanding how these innovations
affect the execution and enforcement of agency contracts is essential.

Legal Education and Training: Legal practitioners and agents should receive training that
incorporates cultural and socioeconomic considerations when dealing with agency
relationships. This can help ensure that agency transactions are conducted in a manner that
respects local customs and meets the needs of diverse clients.

21
Monitoring and Adaptation: Policymakers should establish mechanisms for monitoring the
evolving landscape of agency transactions and be prepared to adapt legal frameworks as
necessary. This proactive approach will help ensure that agency law remains relevant and
effective in both countries.

11. References

A. CASES

22
Ajayi v Odutola (1967) NMLR 76

Chidi v Integrated Construction Company (2010) 7 NWLR (Pt. 1184) 234

Consumer Protection Council v Intercontinental Bank Plc (2011) 10 NWLR (Pt. 1251) 1

Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd. [1943] AC 32.

First Bank of Nigeria Plc v Maiwada (2020) LPELR-50570 (SC)

Forest Products Marketing Board v Nana Kofi Agyekum II [1984-86] 1 GLR 39

Industrial and Commercial Workers Union (ICU) Ghana v Ghana Cocoa Board [2009]
SCGLR 77

John Holt & Co. Ltd. v Amodu Tijani (1972) 10 NLR 18

Labour Ministry v Solid Mining International Ltd (2020) LPELR-50360(CA)

Lekki Concession Co. Ltd v Fidelity Bank Plc (2019) LPELR-46407(CA)

Lindley v Lacey [1859] EWHC QB J73.

Mohammed v UBA Plc (2012) 1 NWLR (Pt. 1286) 445

Nigerian Agricultural Cooperative and Rural Development Bank Ltd v Adeniyi (2005) FWLR
(Pt. 288) 385

Nigerian Brokers Association v Financial Services Ltd. (2020) NGCA 87

Okafor v Nweke (2018) 5 NWLR (Pt. 1098) 50

Okafor v Onyema (1983) 2 SCNLR 224

Okonkwo v Ojiako (2015) 6 NWLR (Pt. 1453) 95

Omehia v INEC & Ors (2012) LPELR-20803(SC)

Rainbow Trading Company v Mercantile Agent Services (2021) NGHC 45

B. PUBLICATIONS

23
Acheampong, Y. (2017). Comparative Analysis of Agency Jurisprudence in Ghana and
Nigeria. West African Law Review, 22(1), 78-9

Amoako-Tuffour, A. A. (2018). Advances in Agency Law in Ghana. Legal Scholars.

Dr. Abdul, A. A. (2020). The Dynamics of Agency Relationships in Nigerian Commercial

Law. Nigerian Journal of Business Law, 15(2), 112-128.

Frimpong, K. (2017). Modern Agency Law in Ghana. Legal Publications.

Ghana Contract Act (1960). Ghana Legal Information Institute.

https://www.ghanalegal.com/.

Jones, M. B. (2020). Agency Law in Modern Business. Academic Press.

Okoli, C. (2015). Contemporary Perspectives on Agency Law in Nigeria. Juris Publishers.

Owusu, K. (2021). Cultural and Socioeconomic Influences on Agency Jurisprudence in

Ghana. Ghana Law Journal, 35(2), 221-240.

Prof. Okoli, C. (2019). Agency Relationships in Nigerian Business. In K. Frimpong & A. A.

Tuffour (Eds.), Commercial Law in Africa (pp. 45-67). Legal Publications.

Rainbow Trading Company v. Mercantile Agent Services (2021) NGHC 45. 2 Nig. L. Rep.
129.

Smith, J. A. (2018). Agency and Commercial Transactions in Nigeria. Legal Publishers.

C. STATUTES

Nigerian Sale of Goods Act (1893).

Contract Law

Companies and Allied Matters Act (CAMA) 2020

Nigerian Evidence Act 2011

Partnership Act

Ghana Contracts Act (1960 (Act 25).

Companies Act, 2019 (Act 992)

24
Partnerships Act, 1962 (Act 152)

Contract Act, 1960 (Act 25)

Sale of Goods Act, 1962 (Act 137)

25