4 Step Process Essay Example

Step 1 †Identify the area of law This four step process refers to liabilities of an agent. The case involves an agent called Tim Jones who represents an anonymous seller of chocolate products. Tim arranges a contract with ABC Foods Pty Ltd for the supply of chocolates to the various shops of ABC. Tim fails to notify his principle of the contract hence the supply of chocolates is never produced. ABC is trying to sue Tim for non-performance under the terms of the contract. This process will advise Tim of his position and the options he may have. Step 2 †Explain the law John D Maltas (2008, 18) describes agency in a legal sense as a relationship which exists between two parties whereby one (the agent) is authorised by the other (the principle) to do, on his/her behalf. The agent receives an extension or grant of the contractual powers of the principal. The principle would then determine the limits of the agent’s authority. Many business matters are conducted through the instrumentality of an agent. An agent is usually employed to bring about a contractual relationship between the principal and a third party. A Principle will be bound by what the agent does on the principal’s behalf provided that the agent has acted within the scope of his/her authority. An agency relationship can be created in one of four ways. Express agreement, implied agreement, operation of law and ratification. Express agreement is a contract, oral or written which contains the intentions of the involved parties in words. Implied agreement can be effective in two situations; if actual authority implies it or if it is implied via estoppel. In the case Australia and New Zealand Bank Ltd v Ateliers de Constructions Electrocutes de Charleroi [1967] 1 AC 86 held that an agent duly appointed to act for the principal in certain business dealings, had actual implied authority to open a bank account to give effect to the businesses arrangements. Estoppel is to remedy injustice that would flow