hey mike , ive been reading the opentuition coursenotes for f4 , and ive found them to be pretty usefull honestly . however theres this one thing that i cant seem to understand . chapter 10 global varient , agency law , the agency relationship by " ratification " , i know what ratification means , i just cant link to the agency theory thing and especcialyy in the 3rd bullet point " ratification is not possible if , at the time the agent entered into the agreement , the principaal did not exist" ----> Makes no sense.. could please elaborate this one bit to me please ?
Ask the Tutor ACCA LW
ratification ?????
Think about the case Kelner and Baxter. The promoter entered into a contract to buy a quantity of wine on behalf of the "proposed Gravesend Royal Alexandra Hotel" .
The company was formed, the wine delivered and consumed, the hotel closed down and the wine was never paid for. The wine supplier claimed against the promoter. The promoter defended himself by claiming that the contract was on behalf of the hotel. But at the time the contract was entered into, the principal ( the hotel ) didn't exist and it's not possible to be the agent of someone who doesn't exist
The company was formed, the wine delivered and consumed, the hotel closed down and the wine was never paid for. The wine supplier claimed against the promoter. The promoter defended himself by claiming that the contract was on behalf of the hotel. But at the time the contract was entered into, the principal ( the hotel ) didn't exist and it's not possible to be the agent of someone who doesn't exist
So were the promoters sued?
Yes they were, and they lost. You cannot be an agent for a non-existent principal
And even though the principal may later exist (Kelner v Baxter) at the time the contract was entered into by the "agent" there was no principal and therefore there could be no agent
Interesting.Thank you.
You're welcome
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