Agent acting without or exceeding its authority

1. Agent acting without or exceeding its authority Will the contract of purchase-sale bind the principle? The principle authorizes the agent to by on its behalf a car but without exceeding a 10.000 litai The agent concludes contract with the third party for the purchase of the car at 20.000 litai.

2. Agent acting without or exceeding its authorityWhere an agent acts without authority or exceeds its authority, its acts do not affect the legal relations between the principal and the third party. The contract of purchase-sale will not affect the principal’s and the seller’s legal relations The agent has exceeded the authority conferred by the principal. The contract of purchase-sale will affect only the agent’s and the seller’s legal relations

3. Agent acting without or exceeding its authority The employee has been always buying the gold in the name of the employer from the same salesman. The salesman believes the employee to be the agent of the employer. The salesman does not know the employee needs the aproaval from the employer in advance for entering into contracts for more that 10.000 litai. Will the contract of purchase-sale bind the employer? The employerhas authorized the employee to buy the raw material for making jewelery. The approval for entering into contract for 10.000 litaiormore is needed in advance. The employee enters into the contract for the purchase of the gold for more that 20.000 litai. The employee has not got the approval from the employer to enterintothe contract

4. Agent acting without or exceeding its authority Apparent authority: Where the principal causes the third party reasonably to believe that the agent has authority to act on behalf of the principal and that the agent is acting within the scope of that authority, the principal may not invoke against the third party the lack of authority of the agent.

5. Agent acting without or exceeding its authority Apparentauthority: The contract of purchase-sale will bind the employer and the salesman as it was reasonable for the salesman to believe that the employee was acting with authority. The employee has exceeded the authority confered by the employer. The employee is materialy liable for exceeding authority to the employer. The contract of purchase-sale will not affect the employee’s and the salesman’s legal relations

6. Agent acting without or exceeding its authority The Chief Financial Officer of the company OMEGA has no authority to enter into the financial contracts. Though lacking the authority, the Chief Financial Officer has repeatedly entered into financial transactions withthe bank Nordea on behalf of the company having the Board of Directors always acquiesced to thesetransactions. Will the transaction No. 156 bindthecompany? The transaction No. 156 appeared to be disadvantageos to the company and the Board of the company objects to it on the base of the Chief Financial Officer’s lack of authority. The Chief Financial Officer enters into a new financial transaction No. 156 with the bank.

7. Agent acting without or exceeding its authority The Board of the company by having repeatedly acquiesced to the transactions entered by the Chief Financial Officer made the bank OMEGA reasonably to believe that the Chief Financial Officer had the authority to enter such transactions on behalf of the company. Even though there was no agency relationship between the company and the Chief Financial Officer concerning financial transaction, the Board has created it by estoppel. The transaction No. 156 will bind the company. Agency created by estoppels or by apparent authority No legal relations is created between the Chief Financial Officer and the bank.

8. Ratification After few days the principle has second thoughts about the car. 1. Can he avoid the contract with the car seller? 2. Can he sue the agent for exceeding authority? The principle pays 20.000 litai for the car. A principle authorizes an agent to buy a car for 10.000 litai. The agent buys the car for 20.000 litai.

9. Ratification After few days the priciples has second thoughts about the car. 1. The principle can’t avoid the contract with the car seller 2. The principle can’t sue the agent. Why? The principle has ratified the agents authority by paying 20.000 litai for the car. Theagenthasexceededhisauthority.

10. Ratification The John has not got 20.000 litai, but as the payment is put off for one year and he really likes the car he decides to ratify the exceeded authority. Can the car seller avoid the contract with John? John authorizes the company ALFA to buy a car for 10.000 litai. John and the company ALFA agrees not to disclose John’s representation The company ALFA buys the car for 20.000 litai for John with a payment reservation for one year. The car seller thinks he is dealing with the company ALFA.

11. Ratification Although the John has ratified the company ALFA exceeded authority, the car seller has right to exclude the ratification. The car seller shall avoid the contract with John. The company ALFA has exceeded the authority conferred by John, but John ratifies the authority. The car seller did not know or ought to knew he was dealing with John’s agent. He thought he was dealing with a buyer.

12. Conflictofinterest Will foreign client will be bind by the contract of the purchase-sale for the apartment with solicitor’s father? Solicitor is requested by foreign client to purchase on its behalf an apartment in solicitor’s city. The solicitor enters into the contract of the purchase-sale for the apartment with his father on behalf of the foreign client not telling that to his client.

13. Conflictofinterest The foreign client will not be bind by the contract of the purchase-sale for the apartament with solicitors father. The solicitor ought to have disclosed the conflict of interest. The solicitor’s father ought to have known about the conflict of interest

14. Conflict of interest Foreign and local clients do not know they are represented by the same solicitor, and solicitor does not reveals that to them. Will foreign client will be bind by the contract of the purchase-sale for the apartment with solicitor’s local client? Solicitor is requested by foreign client to purchase on its behalf an apartment in solicitor’s city. The solicitor enters into the contract of the purchase-sale for the apartment with his local client on behalf of the foreign client.

15. Conflictofinterest The foreign client will be bind by the contract of the purchase-sale for the apartment with solicitor’s local client as long as the third party is satisfied with the contract because it either did not know about the conflict of interest The solicitor ought to have disclosed the conflict of interest to foreign client. The solicitor is liable for not disclosing the conflict of interest. The solicitor ought to have disclosed the conflict of interest to local client.

16. Conflictofinterest Foreign and local clients do not know they are represented by the same solicitor, and solicitor does not reveals that to them. Will foreign client will be bind by the contract of the purchase-sale for the apartment with solicitor’s local client? Solicitor is requested by foreign client to purchase on its behalf an apartment in solicitor’s city. The client orders the solicitor to byu the apartment of 61 m2 for 10.000 litai in the city center. The solicitor enters into the contract of the purchase-sale for the apartment of 61 m2 for 10.000 litai in the city center with his local client.

17. Conflictofinterest The foreign client will be bind by the contract of the purchase-sale for the apartament with solicitor’s local client. The solicitor ought to have disclosed the conflict of interest to foreign client. The solicitor is liable for not disclosing the conflict of interest. The solicitor did not had margin to manoeuvre.

18. Conflictofinterest The agent reveals the the companies he is dealing with is owned by himself. The principle does not like the price for oranges agreed by the agent. Can he avoid the contract with the company due to conflict of interest with the agent? An agent is requested to purchase specified quantity of oranges on its behalf. The priciple does not specify the price. The agent enters into the contract with one of his companies selling oranges. The price for specified quantyti of oranges is a little bit higher than average market price.

19. Conflictofinterest The principle can not avoid the contract with the company due to conflict of interest. An agent has revealed the the conflict of interest to the principle before hand. The agent has a conflict of interest while he is representing the principle and owning the companies distributing the oranges at the same time.

20. Terminationofauthority Principal opens a branch office in Kaunas city. An advertisement published in the local newspaper indicates Managing Director John as having full authority to act on behalf of principal. When principal subsequently revokes John’s authority, a similar notice thereof in the same newspaper is published. Will the principal be the party to the contract even though he has terminated the authority of his agent? Priciple has terminated John’s authority Despite termination of theauthority, John contracts on behalf of the principle with the company

21. Terminationofauthority As it concerns the third parties the principle has terminated the authority in the same way it has granted to John – by publishing advertisment in local newspaper. The principle won’t be the party to such contracts Priciple has terminated John’s authority John will be a party to the contracts concluded after the termination of his authority by the principle.

22. Terminationofauthority • Company According to principal’s will, all the property has been left to the principal’s children. The children take over the control of warehouse from John. John asks the children for the compensation for running the warehouse after principle’s death. The children asks John for the compensation for selling the fruits without having the authority. The principal has authorized John to look up his warehouse of fruits. One day John finds out that principle has died in car accident. After the death of the principle John sold all the fruits to the company trading fruits.

23. Terminationofauthority • Company The children owes the compensation to John for running the warehouse after principle’s death and saving the fruits from turning bad. The children is the party to the contract according which John had sold the fruits to the company despite the fact that his authority has been terminated because the circumstances of the case has made it necessary for John to perform additional acts in order to prevent the principal’s interests from being harmed. After principle has died John’s authority has terminated. Despite the termination of John’s authority, John has the right to sell fruits.

24. Sub-agency • Student B Director of the company BETA and the student A concludes the contract of mandate. According to the contract the student is obligated to find and contract good lawers on behalf of the BETA in Kaunas city. Can the company avoid the contract with the lawyer claiming that student A did not have the authority to contract subagents? Student B contracts the lawyer on behalf of the BETA. The contract of mandate is silent on student’s A right to consign other agents. Student A has no knowledge on any lawyers . He concludes the sub-contract of mandate with student B who is studing law and is familiar with the lawyers in Kaunas.

25. Sub-agency • Student B The company shall not avoid the contract with the lawyer because the director of the company could not reasonably expect the student A to find the good lawyers. An agent has IMPLIED AUTHORITY to appoint a sub-agent to perform acts which it is not reasonable to expect the agent to perform itself. Student B contracts the lawyer on behalf of the BETA. Student A has IMPLIED RIGHT to contract the sub-agent.