Agency and Negligence Flashcards

Vocabulary-style flashcards covering the essential legal terms, standards, and case law regarding agency relationships and the tort of negligence.

Principal

The person who has legally empowered the agent to enter into contractual relations with a third party.

Commercial agent

An independent self-employed agent (individual or company) who has a continuing authority in connection with the principal's business of the sale or purchase of goods.

Agency by estoppel

A relationship created where the principal's conduct gives the third party the impression that the agent has authority, also known as the agent being 'held out'.

Agency by necessity

A relationship created in an emergency (per Sachs v Miklos) where an agent with a pre-existing contractual relationship acts in good faith for the principal when contact is impossible.

Agency by ratification

The creation of a principal-agent relationship with retrospective effect, provided the principal was in existence and had legal capacity at the time of the act.

Lien

The right of an agent to retain property belonging to the principal until outstanding payments (remuneration or indemnity) are settled.

Actual express authority

Power to act for a principal that has been agreed verbally or in writing, the extent of which depends on the construction of the words used on appointment.

Actual implied authority

The agent's power to bind a principal as implied by the position held, such as a managing director's power to bind a company in commercial contracts.

Apparent or ostensible authority

Authority arising when a principal represents to a third party that an agent has the power to bind them, and the third party relies on that representation (Freeman and Lockyear v Buckhurst Park Properties).

Tort

An act or omission by a defendant responsible for causing injury or damage to a claimant, occurring without the need for a previous contractual relationship.

Neighbourhood principle

Defined in Donoghue v Stevenson as the duty of care owed to persons so closely and directly affected by an act that they ought reasonably to be in contemplation.

The Nicholas H (1995) factors

Four tests for assessing a duty of care: reasonable foreseeability, proximity, fair just and reasonable, and public policy.

Standard of care

Defined in Blyth v Birmingham Waterworks Co as that of 'a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs'.

Res ipsa loquitur

Latin for 'the facts speak for themselves'; it allows a court to infer a breach of duty when the cause of damage is unknown but was under the defendant's control.

But for test

The test for causation established in Barnett v Chelsea, where the claimant must prove that the damage would not have occurred but for the defendant's actions.

Novus actus interveniens

A new act that intervenes to break the chain of causation, causing the defendant's liability to cease at that point.

The Wagon Mound principle

The rule that loss is only recoverable in negligence if the harm suffered was a foreseeable result of the breach.

Special relationship

A relationship (per Hedley Byrne v Heller) that arises when professional advice is requested and given in a professional capacity, resulting in reasonable reliance and economic loss.

Caparo Industries plc v Dickman

A case clarifying that auditors do not owe a duty of care to individual shareholders or potential bidders who rely on statutory accounts for general circulation.

Liability limitation agreement

An agreement between a company and an auditor limiting the auditor's liability for negligence to a fair and reasonable amount, subject to annual approval by ordinary resolution.

Contributory negligence

A partial defence used to reduce liability by showing the damage or loss suffered was partly due to the claimant's own fault.

Volenti non fit injuria

A complete defence applying when a claimant voluntarily agrees to undertake the legal risk of loss or damage at their own expense.

Vicarious liability

A legal doctrine where one person (such as an employer or principal) is held legally responsible for the tortious acts of another (employee or agent).

Limitation Act

A statute setting time limits for claims: six years from a breach or tortious act, or three years for personal injury claims.