Ansons Law of Contract
Describe about the Ansons Law of Contract?
Answer:
The law of agency also includes “lingering authority” or “apparent authority”. According to it, if the principal fails to inform the parties involved in the transaction of the termination of the agency and the parties act in the belief that the agency is still in effect, or the parties have enough reason to believe that the agency has in fact not been terminated, then, the principle will be held liable for the acts done by the agent. (Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd, 1964)
In the given case, Record owned a farm that was managed by his agent Berry, who lived on that farm. Berry hired Wagner to bale the hay, as Record’s agent, and asked Wagner to bill it to Record. The transaction was complete. Later, the agency was terminated but Berry continued to stay on the land as a tenant. Wagner was again, hired by Berry to bale the hay and was again, asked to bill to Record. This time, Record refused to pay citing that the agency was terminated and Berry was not authorised by him for that act. Wagner Sues.
Wagner has a right to claim damage
s from Record as nothing appeared to change and he had every reason to believe ta Berry was acting in his capacity as Record’s agent. Hence, Wagner has no fault and by the law of agency he is bound to claim the damages.
According to the law of agency, if an agent acts on behalf of the principal in emergency situations where the principal’s approval cannot be obtained using reasonable means, he cannot be held liable for the acts done in pursuance of his powers as an agent of the principal (McMeel, 2000). This clearly indicates that an agent works on behalf of the principle and is not liable for the acts of the owner.
The agent cannot be held liable.
In the case, Ms Baumann accompanied her sick mother to the hospital where she signed a document that stated that she undertook the liability to pay for any expenses that couldn’t be recovered through her mother’s insurance. The expenses came to $19013.42. Baumann was asked to pay on the premise that she signed the document that it was a “guarantee of payment”. Baumann Refused
The contention of Ms Baumann in this case, is correct. The hospital cannot compel Ms Baumann to pay for the expenses as she was merely acting in her capacity as her mother’s agent, in the case of an emergency (Saintier, 2008). The ultimate liability is not hers. Hence, Ms baumann cannot be forced in this regard as she was not acting for herself.
According to Title VII of the Civil Rights Act of 1964, no employer can discriminate against a job applicant based on their race, religion, ethnicity or gender. However, if the employer has reasonable reasons to justify the discrimination, Title VII does not affect him. Reasonable reasons include a prior felony that puts the employer at high risk, given the nature of the job position applied for. The applicant is however, given an opportunity to explain the circumstances of the arrest. (Home : Laws, Regulations & Guidance : Prohibited Practices)
In this case, Alex Riley, a black man was refused the job of a photographer in continental photo, Inc, stating the reasons that, the company excluded all felony applicants and that, his questionable honesty would prove troublesome as he had to handle a lot of cash. Alex Riley contended that he was discriminated against and that, title VII had been violated.
The contention of Alex Riley in this case, holds good. The company has violated title VII as its policy excludes all felony convictions. Its justification that, there will be a necessity to handle a lot of cash is not sound and cannot be accepted. According to EEOC, it wouldn’t matter if he was convicted of murder. The case still would favour Alex Riley.
According to partnership laws, the partners are acting one for all. The acts of any of the partners can be binding on the entire firm and all the partners. The partners are jointly and severally liable for the acts of one another and each. Further it is provided that, even if the parties are not in a formal arrangement that constitutes a partnership, if the arrangement is such as all the facts point to a partnership like association, it will be considered as such. (Deards, Key features of partnership and the 1980 Act)
In the given case, Daniel Zuckerman and his mother, Elaine brought an action against Dr Joseph Antenucci and Dr Jose Pena. Although the summons didn’t explicitly state the nature of their association, as it became apparent, eventually. They will be prosecuted in the court of law as a partnership. Even though, only one of the partners indulged in the malpractice, the liability will be jointly shared.
Hence, the contention of Antenucci that he can’t be held liable for his partner’s acts is not valid and the amount of the verdict, being $4 million, has to be borne by both the partners, jointly and severally.
According to the laws relating to companies and their corporate personality, if the intention is to defraud the people associated with the company, then, the incorporation of the company can be said to be used as a corporate veil and in those cases, the individual benefitting wrongly from such veil and the company behind it shall be treated as one and the same for the purposes of fixing liability. The corporate veil is also known as corporate fiction (Beatson et.al, 2010)
In the case given cases, Elkridge an employee and tenant of the building that the corporation acquired from Siebrecht by paying consideration of 10000 worth of stock, fell down a flight of stairs that was defective. She sues Siebrecht on the premise that he had used the corporation as a tool to escape personal liability.
Elenkrieg’s contention does not hold good, in this case. Even though, there is the effect of escaping personal liability, there needs to be an intention to defraud by the incorporation of the company and hence, Siebrecht can’t be held liable in this case.
SEC has pursued the theory of misappropriation against Falcone. The theory of misappropriation holds good when, the person involved in the offense of insider trading is not a corporate person but is in a fiduciary relationship with the person who gave him the information in the first place. He had a duty to not disclose sensitive information to others, before it was made officially public (Peel & Treitel, 2011)
In this case, Gregory Savage, an employee of Hudson News faxed to his neighbour, a stockbroker named Larry Strath, prior to the close of the market on Thursday and prior to release to the public that evening, information obtained from the Business week magazine, of sensitive nature, being in a fiduciary position. Strath traded on the information and passed it on to Joseph Falcone, who traded on that information, so obtained.
Although in this case, the information was tipped to Falcone, which was previously tipped to Strath by the Gregory Savage. He is in fiduciary position and if Falcone had no prior information about the breach of trust by the person tipping the information, he cannot be held liable. Three conditions must be fulfilled. One, Falcone must know the breach and two, the person, that is, Gregory savage must have, in fact, breached and three, Falcone must have traded on that information.
ordinarily, accountants are not liable to third parties due to operation of privity of contract. However, in cases where the third party is known to eventually rely on the accountant’s work and there is gross negligence on part of the accountant while carrying out his work, such conditions constitute an exception to privity of contract and the accountant can be held liable for his acts (Sealy & Hooley, 2009)
In this case, the accountant’s contention that, he was not in privity of contract with him, does not hold good. Thayer, the manager of Montana Merchandising, Inc. , hired the services of Bloomgren, an accountant. Bloomgren was entrusted with the job of auditing the accounts of Intermountain merchandising, whose business Montana Inc was considering to purchase. Relying on the audit report of the accountant, which showed the business to be profitable, Thayer went ahead with the purchase. Later, when facts relating to the mistakes made in the audit by the accountant came into lights the business was, in fact, insolvent, the accountant was sued.
A derivate suit is a result of escalating mistrust between the management and the shareholders. There is a very real possibility that the management, being in position of trust and enjoying the benefits of incorporation might mismanage corporation’s funds. A derivate suit lets the shareholders question such behaviour (Choper et. al, 2009).
Dunaway negotiated a sale deed and a non-compete agreement in exchange of a car, all of which were corporate assets. He failed to disclose the facts of the case. It cannot be said that the defendant, Mr Dunaway has made sufficient disclosure as, an agreement that involved corporation’s assets should be intimated to all the concerned parties. The fact that the derivative action was brought against Dunaway by minority shareholders, is not of consequence.
There can be said with certainty that Dunaway acted against his fiduciary duty to the corporation. He engaged in the sale agreement and devaluation of assets and also the non-compete agreement all by him and there was mismanagement of funds involved in the, and as a result of, the above transactions. His fiduciary duty to the corporation isn’t done.
References
Beatson,J, Burrows A and Cartwright,J (2010) Anson's Law of Contract (29th edn OUP)
Choper, JH, Coffee, JC and Gilson, R. J (2009). Cases and Materials on Corporations (7th ed. Aspen )
McMeel, G (2000) Philosophical Foundations of the Law of Agency (3rd ed. Oxford Press)
Sealy, LS and Hooley, RJA (2009) Commercial Law: Text, Cases and Materials (4th edn OUP)
Peel E, Treitel,GH (2011) Treitel on the Law of Contract (13th ed. Oxford press)
Saintier,S (2008) Final guidelines on compensation of commercial agents (3th edn OUP)
West’s Business Law Agency: Liability to Third Parties and Termination (9th Ed.)
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