Types of Principal 1- named principal – name disclosed by A to 3 rd party

1. Types of Principal 1- named principal – name disclosed by A to 3rd party 2- disclosed principal – its presence is known by 3rd party, but identity unknown 3- undisclosed principal – existence and identity is unknown at the time of the contract

2. Effects of contract made by agent i- A and named P s. 183 and s. 179 – liability and right under the contract made by an authorised A for a named P is on P. h/ever A may be personally liable if: • A agrees to be personally liable for the contract. S. 183 “if there is no contract to that effect…” The test is whether A had contracted in such a way as to make himself personally liable having regard to the surrounding circumstances

3. Ching Yuen Tung v Bep Aketik A contracted with 3rd party on behalf of a New York P. When 3rd party claimed payment, A refused saying he was merely an agent. In a previous dealing between A and the 3rd party, A acted on behalf of another but the payment was made through A; not directly by that other party. 3rd party assumed a similar payment practice in the present case. .

4. b) A executes a deed in his own name – personally liable unless he has a PA. c) Signs a negotiable instrument in his name – no indication of doing it as agent. d) A acted beyond authority and P did not ratify it. e) Where custom of the trade imposes liability on A.

5. ii- A and a disclosed P Agency r/ship exists. S. 183rights and liabilities under the contract belong to P not A. S. 179 – A acted within authority – P can sue and be sued. But A may be held personally liable by 3rd party (s • if, a) s. 183(a), A entered into a contract for a merchant resident abroad.

6. Medicon Plastic Industries Sdn Bhd v Syarikat Cosa Sdn Bhd S. 183(a) w/out doubt imposed on A personal liability for a contract entered into on behalf of P who resides in a foreign country (b) s. 183 (b), When A did not name P, A personally liable. Covers undisclosed P and also disclosed but not name. (c) s. 183(c) When the named P cannot be sued. For example he is of unsound mind or a minor

7. iii- A and undisclosed P A had authority, but did not disclose or name P. Effect: • 3rd party has right to sue either A or P. s 186 A can be personally liable because 3rd did not know that he was an agent for another. .

8. Pernas Trading Sdn Bhd v Persatuan Peladang Bakti Melaka Pernas thought that Peladang ordered fertelizer and chemicals for themselves. Pernas sued for balance of the price, Peladang refused claiming that the items were bought for another party. Peladang contracted in such a form that made them personally liable

9. Liability of A and P under s. 186 is joint and several. b) s. 184 (a) undisclosed P may enforce the contract on 3rd party. P’s rights is subject to rights and obligations that subsist between A and 3rd party. S. 185 Example: A owes RM100 to B, sell RM500 worth of sugar to B. A is acting for C. But B does not know or has reasonable ground to suspect that A is C’s agent. C cannot compel B to take the sugar w/out a right to set-off A’s debt.

10. If P disclosed himself to 3rd party before the contract is completed – s. 184(b) he cannot enforce the contract against the 3rd party if the 3rd party can show that he would not have contracted if he knew P’s identity or that A was not P. (identity of P or the fact that there was an agency was material to the contract)

11. Both 3rd party and P can have the rights explained in • and (b) if A had acted within his authority and the contract does not states otherwise. (c) A’s right against 3rd party If A acts as if he was P, he is entitled to enforce the contract made on behalf of undisclosed P. If he acted as agent while in reality he is not, he cannot enforce the contract. S. 189

12. Termination of Agency 2 ways 1- by the act of A and P Mutual consent or unilateral revocation by P or unilateral renunciation by A. S. 154 S. 160 revocation or renunciation – express/implied. Notice is required in case of revocation or renunciation.

13. Reasonable notice – depends on the fact and circumstances of the case. For example, the period of the agency is also relevant. Sohrabji v Oriental Security Assurance Co 31/2 months was inadequate to properly terminate an agency which had lasted for nearly 50 years.

14. Syarikat Jaya v Star Publication (M) Bhd 6 months notice was reasonable Failure to give notice • P’s failure – A entitled to damages for the amount A might have earned under the contract had P did not revoke the authority; • A’s failure and the agency is for an indefinite duration –A must pay damages to P . s. 159; if agency is for a fixed period – A compensates P for premature renunciation, s. 158

15. P’s right to revoke agency is limited. Cannot revoke if; • A has an interest in the property which form the subject matter of their agency relationship. S. 155 Example: A appointed B to sell A’s land. The proceeds will be used to pay the debts owes by A to B. A cannot revoke his authority. His death or unsoundness of mind will not affect the agency.

16. b) A had partly exercised the given authority, with regard to the acts and obligations that arise from A’s exercise of that authority. S. 157 Example: P authorised A to buy cotton on P’s account and to pay for the cotton with P’s money which is in A’s hand. A bought the cotton in his own name so that he became personally liable for the price. P cannot revoke A’s authority to pay for the cotton with P’s money

17. Read v Anderson P instructed A to bets on his behalf. According to the custom, a turf commission agent always bets in his own name. P refused to pay when A lost in the betting. P could not revoke A’s authority because A’s had acted on that authority and would face disqualification if he failed to pay the lost bet.

18. S 161:Revocation effective against A – when he knows about the revocation; Example : P instructed A to sell goods. P promised to give 5% commission to A. P later on revoked that authority. Before A received the revocation letter, A sold the goods. The sale binds P to the 3rd party. A is entitled to the commission.

19. S 161 – effective against 3rd party when he knows about it P authorised A by a letter to sell goods. Later P sent a letter to revoke that authority. A sold the goods to C after receiving the 2nd letter. C knew about the 1st letter but not the 2nd letter. C paid the price to A. A absconds with the money. The payment discharges C’s obligation to pay to P. K/ledge about the revocation can come from P or other sources. Fixed period agency, cannot revoke w/out reason, otherwise P must compensate A. [s 158]

20. 2- by operation of law When: i- by the performance of the contract of agency. S.154. “ … business of agency being completed ii- By expiration of the specific period, fixed or implied, even if the business has not been completed iii- by the death of either P or A. s. 154 s. 161 - effective termination in case of death if A or 3rd party notices P’s death

21. iv- insanity of A or P. S. 151, s. 162 v- by bankruptcy or insolvency of P. s. 154 vi- events that render agency unlawful occur. Example: P becomes an enemy alien, or when the subject- matter is lost or destroyed.