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Agency law

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Agency law

  • This topic has 7 replies, 2 voices, and was last updated 1 year ago by MikeLittle.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • August 18, 2023 at 5:54 pm #690181
    whydoyoucare
    Participant
    • Topics: 50
    • Replies: 46
    • ☆☆

    In the context of the law of agency, an agent will NOT be liable for a contract in which of the following Instances?

    Where the agent fails to disclose that they are acting as such
    Where the agent intends to take the benefit of the contract and does not disclose they are acting as an agent
    Where the agent acts on their own behalf although claiming to be an agent

    Why is answer A? Please explain each statement in turn briefly.

    August 18, 2023 at 8:29 pm #690204
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    Contracts for personal benefit and contracts on own behalf, the agent will be liable.

    But contracts entered into by an agent on behalf of a principal do not make the agent potentially liable.

    Where’s your problem?

    August 18, 2023 at 10:46 pm #690216
    whydoyoucare
    Participant
    • Topics: 50
    • Replies: 46
    • ☆☆

    I don’t understand why A is answer. It’s says where agent fails to disclose they’re acting as such” AS WHATTT?

    August 19, 2023 at 8:27 am #690236
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    Fails to disclose that they are acting as an agent.

    OK?

    August 19, 2023 at 7:46 pm #690286
    whydoyoucare
    Participant
    • Topics: 50
    • Replies: 46
    • ☆☆

    Then he should be liable if he fails to disclose. Why is he not?

    August 20, 2023 at 8:12 am #690306
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    No, this is the idea of ‘the undisclosed principal’

    If everything goes well with the contract, there will be no breach and no-one liable.

    If things go wrong, it IS possible that the agent will be held liable. But then, on the subsequent disclosure of the identity of the principal, the principal assumes primary liability.

    Yes, ok, what if the principal has subsequently become bankrupt, or died. That I can’t answer!

    OK now?

    August 20, 2023 at 9:55 am #690318
    whydoyoucare
    Participant
    • Topics: 50
    • Replies: 46
    • ☆☆

    So undisclosed principal has as per Bpp gives rise to joint liability with the principal not just the agent. Is that what we follow here

    August 20, 2023 at 3:19 pm #690333
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    Y e s … BUT, if the agent is acting within the agent’s authority, then the principal will assume that primary responsibility

    OK?

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