LAW299 ILAC TUTORIAL PDF

Preview

Summary

NURUL AINA BINTI MOHAMADON 2019210284 N4AM1104ENotrah instructed Meor, her agent, to store 1000 sacks of potatoes, 200 chairs and 300 desks, which belonged to her in Meor’s warehouse until she could find a buyer for them. A few days later, Meor discovered that the potatoes were beginning to rot and ...

Description

NURUL AINA BINTI MOHAMADON

2019210284

N4AM1104E

Notrah instructed Meor, her agent, to store 1000 sacks of potatoes, 200 chairs and 300 desks, which belonged to her in Meor’s warehouse until she could find a buyer for them. A few days later, Meor discovered that the potatoes were beginning to rot and likely to contaminate the other perishable goods kept in the werehouse. He tried to contact Notrah but was informed that she was out of town and could not be reached. Meor later sold the potatoes, desks and chairs to Hazlifah below market price. Advice Notrah.

ISSUE I. II.

Whether Meor violate his duties as an agent Whether Meor has the right to sell the potatoes, desks and chair.

LAW

Under the Law of Agency, there are five sorts of creation which are express appointment by the principal, by implied appointment, by ratification, necessity or operation law and estoppel or holding out. However, in the scenario, the applicable types are determined by the necessity or operation of law and duties of agent. Agency was defined in Section 135 of the Contract Act 1950 as “a relationship that exists between the principal and the agent who has been permitted to act for him or represent for him in dealings with others.” The term “agent” refers to a person hired to perform any act for another or to represent another in dealings with third parties, whereas the term “principal” refers to the person for whom the act is conducted or who is represented. According to Section 142 of the Contract Act 1950 for agent’s authority in an emergency stated that “an agent has authority, in an emergency, to do all such acts for the purpose of protecting his principal from loss as would be done by a person of ordinary prudence, in his own case, under similar case. Necessity arises when there is a real need to enter into the contract. Under certain circumstances a person may become the agent of another without being appointed as such. The courts were willing to regard the agent as though he or she had the required authority to do what was reasonably necessary to rescue the principal's property because of the circumstances of necessity, including the impracticability of the agent communicating with the principal. There are two situations for necessity. First, a wife, who is deserted or who is justified in leaving her husband and has no means of support, can pledge her husband’s credit for the necessaries of life according to the income and position of the husband, even against his wishes. . Second, a commercial agency of necessity occurs when a person is entrusted with another’s property and it becomes necessary to act to preserve that property. According to held case Great Northen Railway Co v Swaffield (1874), the plaintiff had acted as agent of necessity in this matter. Therefore, their claim was successful. It arises when a person is entrusted with another's property and it becomes necessary for him to act in order to protect that property, despite the fact that he has no express permission to do so. Therefore, there are three prerequisites that must be fulfilled. First, it is impossible for the agent to get the principal’s instruction. In the case of Springer v. Great Western Railway Company [1921] 1 KB 257 Plaintiff was entitled to damages, according to the court,

NURUL AINA BINTI MOHAMADON

2019210284

N4AM1104E

because the defendant should have contacted the plaintiff when the ship arrived in Weymouth to obtain instructions. There was no agency of need because the defendant neglected to contact the plaintiff when they had the opportunity. Next is, the agent’s action is necessary, in circumstances, to prevent loss to the principal with respect to the goods committed to his charge (only if urgency exists). This can be explained as the agent's action is to avoid the principal from losing money on perishable items. When items are simply sold because they are inconvenient, however, agency of need does not exist. In the case of Springer v. Great Western Railway Company [1921] 1 KB 257 The plaintiff's claim was upheld by the court, despite the fact that he was involved in the expansion of the doctrine of agency of need to encompass transportation of commodities by land. The plaintiff was held to have had no choice but to arrange for the horse's proper care, therefore there was an agency of necessity. Lastly, the agent of necessity has acted in good faith. In an urgent situation, an agent has authority to act in the best interest for the purpose of protecting his principal from losses, without having a hidden agenda. An agent must exhibit care and diligence in carrying out his work, according to Section 165 of the agency act, which specifies the obligations of an agent. Unless the principal receives notice of his lack of skill, an agent is obligated to handle the agency's business with as much skill as is commonly held by others engaged in similar industry. The agent is always obligated to operate with reasonable diligence and skill, and to compensate his principal for the direct consequences of his own negligence, lack of skill, or misconduct, but not for loss or harm caused indirectly or remotely by such neglect, lack of skill, or misconduct. For example, if an agent is hired to sell products, it is his responsibility to get the best price feasible. Similarly, if an agent receives a higher offer after receiving the first conditionally approved offer, he must notify the principal. According to held case Keppel v Wheeler (1927), for the difference between the two offers, the defendant was accountable to the plaintiff. This is founded on the assumption that the agent must disclose everything that comes to his attention that has the potential to affect the principal's decision to enter into the contract. Furthermore, the agency must communicate with the principal, according to Section 167 of the Agency Act. However, in the event of difficulties, the agent must communicate with and seek directions from the principal with all reasonable diligence. However, Section 142 empowers the agent to use his discretion in choosing a course of action to protect the principal's interests where communication is impossible or impractical, or any delay could result in a loss to the principal. Furthermore, when an agent deals in agency business on his own account without the principal, he has the right of the principal. APPLICATION By applying to the current case, Meor action is applicable to Section 142 of Agency Act. All of his circumtances and situation has completed all three pre-quisite of necessity. As evidence, Meor could not contact his principal, Notrah because she is out of the town.This action supported in the held case of in the case of Springer v. Great Western Railway Company [1921] 1 KB 257 . Next, the agent’s action is necessary. If Meor not selling all the goods, it will be contaminated. Especially the potatoes. If the potatoes not sold and left otherwise the potatoes will be rotting and can cannot be sold to anyone more over it will affect the other goods that located in the same warehouse. And lastly, the agent’s action is

NURUL AINA BINTI MOHAMADON

2019210284

N4AM1104E

in good faith. If Meor not sell all the goods to Hazlifah, Notrah will experience loss because all the goods already contaminated. Meor's action is to prevent the losses that Notrah will incur. On Meor action’s sell the goods below market price, it is reasonable for potatoes because the potatoes already starting to rot. Unless the potatoes still in good condition, the potatoes can be sell according to the standard market price. However, for desks and chair, Meor need to consider the condition of the goods. If the chairs and desk still in good condition, he need to sell it according to the standard market price. But in his situation, the desks and table are likely contaminated from the potatoes. So he can sell it below the market price. Meor’s action are has been supported in Section 165 Agency Act, which he need to offer the best price. CONCLUSION I.

In conclusion, Meor did not violate his duties as an agent. All of his action not contradictory with Agency Act

II.

In conclusion, Meor has the right to sell the potatoes, desks and chair to avoid principal losses....