Business Law

Difference between binding precedent and persuasive precedent

1.     Binding precedent: previous decision MUST be followed and applied

Persuasive precedent: previous decision is NOT binding but will be considered and MAY be followed

General Agent

appointed by the principal to perform all acts/transactions related to a particular trade or business

Special agent

appointed by principal to perform a particular transaction over a limited period of time

Universal agent

one appointed by powers of attorney and given unlimited powers to act on behalf of the principal and do all acts that the principal can do in their transactions with 3rd parties

duty of an agent

duty to follow the principals instructions

duty to act in person

duty to act in good faith

duty to exercise reasonable care and skill

duty to make full disclosure of any personal interests

duty not to make a secret profit

nature of agents authority

principal is not affected unless principal ratifies unauthorised act

principal may be bound but agent may be liable to principal for breach of agency contract

agent is directly liable for 3rd parties for breach of implied warranty of authority

Ratification

principal may retrospectively confirm acts of an agents that were outside of the agents actual authority

Requirements of ratification

agent must contracgt expressly on behalf of the principal

principal must exist at the time of the contract

principal must have legal capacity to make contract

principal ratifies whole contract

ratification must be within a reasonable period of time and before the performance of the contract

Liabilities of an agent

The principal: where the agent disobeys the principal’s instructions or is negligent and the principal suffers the loss

3rd party where there has been a breach of authority and where the agent doesn’t disclose the existence of any agency

• breach of warranty of authority

• where the agent doesn’t disclose the existence of any agency

termination of agency

completion of agency (assigned task)

impossibility of performance

agreement between the principal and the agent

bankruptcy of either principal or agent

death or insanity of either principal or agent

revocation of the agents authority by the principal - valid even if it breaches agency contract

contract

an agreement between 2 or more persons under which they acquire rights and obligations which can be enforced in court

Elements of a contract

1. agreement

2. intention to create a contract

3. form or consideration

4. legal capacity

5. geniune consent

6. legality of object

In order to create a deed certain formalities must be met

a deed must be made through a written document

the document must be signed by the promisor

the promisors signature must be attested by at least one witness who also signs the document

deed

a contract under seal is a binding promise to do something which can be enforced against the promisor whether or not the promise has given consideration or not

difference between a contract and a deed

with a contract there must be an exchange of consideration (something of value) between the promisor and promisee whilst there is no requirement for consideration for a deed to be valid

Valid contract

a contract where all essential elements have been met and is legally enforceable in court

void contract

one that was not a contract in the first place. as far as the law is concerned the contract never existed. such contract has no force or effect

voidable contract

a valid contract but one has some kind of flaw that makes it possible for one party to avoid or get out if they wish

Rules of acceptance

1. must be absolute and unqualified: must be in the exact terms of the offer

2. acceptance must follow the conditions if any is stated in the offer

3. acceptance must be made within the time prescribed or if no time has been prescribed within a reasonable time

4. acceptance must be made in reliance on the offer. only persons who offer was made to and have offer in mind at the point of acceptance

5. acceptance must be communicated to the offeror for there to be a binding agreement

   1. communication through words, writing or conduct

   2. can’t be inferred from silence or inaction

   3. unless expressly or impied performance of stipualted act will be accpeted

   4. EXCEPTION: POSTAL ACCEPTANCE RULE

acceptance must be communicated

communication by words, writing or conduct (past dealings or reasonable person would infer there has been acceptance)

silence is not acceptance

communication must be in a refular and authorised manner

exceptions to communication

postal acceptance: agreement is concluded when acceptance is posted and not when it’s received

rule will be excluded in situations where the offeror requires actual communication of acceptance (stating “acceptance will be effective upon receipt“

rules for consideration

1. consideration may be executed or executory but not past

2. consideration must be sufficient but not needed to be adequate

3. consideration must move from the promise but not necessarily to the promisor

4. performance of an existing obligation is not good consideration

Past consideration is not valid

consideration can be executed or executory but not past

excpetion to Past consideration is not valid

past consideration can be good if the act was

1. rendered at the request of the promiser

2. understanding that the act would be remunerated

3. promise had been made before the act in question

consideration must be sufficient but need not be adequate

consideration must have some value in the eyes of the law BUT it doesn’t necessarily have to be equal to what other party gives

consideration must move from promise but not necessarily to the promiser

only persons who have provided consideration can enforce a promiSE (doctrine of privity) however a person can provide consideration for a contract that would benefit a 3rd party

performance of an existing legal duty is not good consideration

there is no consideration if all that the promiser does is no more than what they are already obliged to do/not do