LEGAL ENVIRONMENT OF BUSINESS (PBA 118)

DIPLOMA IN INFORMATION TECHNOLOGY MANAGEMENT

PRESENTATION ON THE LAW OF AGENCY

BY RACHAEL ANUDUNGA KWARA - 10117854

WHAT IS AGENCY?
• Agency concerns itself with the relationship that exists between a principal and an agent.

• Here, an agent is authorised, either expressly or impliedly, by a principal to act on his

behalf with respect to matters in which he would have otherwise undertaken personally.

• This relationship is known as a fiduciary relationship.

• This relationship is founded on the legal principle of “qui facit per alium facit per se”,
translated to mean he who acts through another is deemed to have acted himself.
WHO IS A PRINCIPAL?

• A principal is a party that empowers or authorizes another party to act on its behalf.

• Principals fall under two categories:

 Disclosed Principal: this is a principal whose identity is known to the third party
with whom business will be conducted by the agent.
 Undisclosed Principal: this is a principal whose identity is not known to the third
parties. As exhibited by the civil engineer in Sika Contracts Ltd. V Gill and Ors
(1978).
WHO IS AN AGENT?
• An agent is a person, group of persons or company charged with the duty of acting on
behalf of another person or entity.

• The agent is required to act in good faith and in the best interest of the principal and not
his selfish interest.

• There are two types of agents; Special and General Agents.

 A special agent is engaged to undertake a single transaction or a series of single
transactions.
 A general agent is engaged to carry out a series of transactions over a period of time.
HOW AN AGENCY IS CREATED?
• An agency can be created through the following:

By an agreement between the parties.

y implication.
By ratification.
By necessity.
By estoppel.
PERSONS WHO QUALIFY TO ACT AS PRINCIPALS
• Any person who qualifies to enter into a contract, qualifies to be a principal.
Which comprises:

Any human being of 21 years of age and of sound mind.

Companies registered under the Companies Act of Ghana, 2019 (Act 992)
Partnerships registered under the Incorporated Private Partnership Act, 1962 (Act
152)
Corporations set up by an Act of Parliament
PERSONS WHO DO NOT QUALIFY TO ACT AS
PRINCIPALS

• Persons below the age of 21.

• Insane persons.

• Intoxicated persons.
SCOPE OF AN AGENT’S AUTHORITY.
• This is the limit to which an agent may exercise his authority or capacity while
acting as an agent.

• This was expressed in Watteau v Fenwick (1893)

• An agent’s authority falls under a few categories. These are;

Express Authority.
Implied Authority.
Apparent Authority
LEGAL SIGNIFICANCE OF AN AGENT’S
AUTHORITY
• The principal is responsible for the acts of the agent where the agent has acted
within the scope of his authority. Where on the other hand the agent has acted
beyond his scope of authority, the agent may personally be held liable.
• The idea of implied authority enables the law to hold the principal liable for the
acts of the agent even when those acts are not expressly authorised.
• Apparent authority enables the principal to be held liable for acts of the agent
towards third parties, as a result of allowing the agent to do those acts.
LEGAL SIGNIFICANCE OF AN AGENT’S AUTHORITY

• In spite of the types of authority, a person who knows or ought to know that an
agent lacks authority to undertake a particular transaction and proceeds to deal
with that person cannot hold the agent’s principal responsible.
• Secondly, where an agent indicates to a third party that he has authority to
undertake a particular transaction with him and that third party relies on that
indication and proceeds to deal with the agent, the third party can hold the agent
responsible for breach of warranty
Conclusion
An agent is a person, persons or entity that contracts or transacts business on behalf of a principal.
The relationship they form is one of a fiduciary nature, with which the agent is to engage in business on
behalf of the principal with the principal’s best interests at heart.
This fiduciary relationship is what is termed as an agency.
An agent’s authority may be expressly given, implied, or apparent.
However, only persons with capacity to contract under the law of contract in Ghana can act as agents..
Legally, a principal is responsible for the acts of an agent (qui facit per alium facit per se). Unless the
agent has acted in excess of his authority.
A principal can be held accountable for the actions of the agent even if he acted ultra vires.
 However, a person with knowledge that the agent is acting ultra vires cannot hold the principal responsible.
 the third party can hold the agent responsible for breach of warranty, where the third party acted on a false
representation of the agent’s authority.