Agency of ratification

A principal can choose to adopt or ratify transactions which were made without his authority. However, there are several requirements to be fulfilled.

First of all, the principle must be disclosed by the agent to the third. For example in the case of Keighley, the agent has purchased the wheat at a higher price in the agent’s own name. Therefore, it render the principal an undisclosed principal and has no right in ratifying the contract.

Secondly, the principal must be inexistent at the time o the agent act. In the case of Kelner v baxter, a promoter had entered into a contract on behalf of a company which is not yet to be formed. The court held that the promoter is liable to the third party.

Thirdly, the principal must have the contracted capacity at the time when the act was done. The principal must have to capacity to make a contract when the agent is making a contract. For example in the case of Boston Deep Sea Fishing Co, the principal was an enemy alien when the contract was made by his agent. Therefore, as an enemy, such capacity is not recognized by the law.

Lastly, an act which is void cannot be ratified. Is pretty much straight forward that something which is void does not has legal effect anymore. Basically, there is no need in to further ratify.

Actual Authority

Actual Authority may arise from three circumstances, impliedly, expressly and Agency of Necessity.

Express authority is pretty straight forward; it is an authority which is expressly conferred by an agreement or by words depending on the construction of words of appointment. However, it might get tricky when one trying to interpret an oral agreement. If any ambiguity were to occure, an agent must interpret in a manner which is reasonable.

Implied authority may arise from 3 circumstances and they are Incidental authority, by contrast and usual authority. Incidental authority simply means an agent has the implied authority to do everything necessary for the ordinarty incident to the express authority in the usual way. For example, an agent is instructed to sell a house was held to have an incidental authority to sign the agreement of sale. Case on point, Rosenbaum v belson. Secondly, an incidental authority can arise by contrast. For example in the case of Earner v Sharp, apparently an agent who was instructed to find a purchaser but was not told to sell the house by contrast does have an incidental authority to sign the contract. Lastly, a usual authority means an agent has implied actual authority to do whatever that is usual in his trade or profession, for the purpose of carrying out his authority or anything necessary or incidental to it. For example a managing director is impliedly to have all the authority as an agent to make contract on behalf of the company because it is the duty of a managing director to run the company. Case on point will be the case of Hely-Hutchison v Brayhead Ltd.

Lastly, Agency of Necessity may arise from an emergency. If it is necessary for the agent to contract with a third party in an emergency to protect or preserve the interest of the principal, then the agent with have an actual authority in making a contract. For example in the case of China Pacific SA, the captain has authorized a salvage operation in order to lighten the ship; the salvors unloaded some of the wheat and put it in storage. The salvors then sue for the storage. The court held that such emergency has created an agent of necessity and the captain will have the authority to make a contract. However, the necessity must be an actual and definite commercial necessity. There are basically four requirements to fulfill; firstly, it must be an emergency. Secondly, as a result of the emergency, it is practically impossible to obtain instruction. Thirdly, it must be bona fide in the agency’s interest not the agent’s personal interest and lastly, the agent must act reasonably.

Apparent Authority

Apparent authority is define by the Freeman as, apparent authority is a legal relationship between the principal and the third party created by a representation made by the agent to the third party intended to be and in fact acted on by the third party that the agent had authority. In a more simple explanation, an apparent authority can be define as a representation made by the agent to the third party claiming that the agent has the authority to act but actually, the agent does not have the actual authority. However, the agent managed to persuade the third party that there is a legal relationship between the principal and the third party.

An apparent authority can be termed as agency by estoppels, in other words, it is an equitable principles. As for most of the equitable estoppels, it involve representation, reliance and unfair as a result of alteration of terms or contracts. There are 3 basic requirements to be met in order to qualify as an agency by estoppels. Firstly, there must be a representation. A representation can either be in writing or by conduct, for example, an appointment of a person to a Managing Director can be seen as a form of representation by conduct. Secondly, there must be reliance, the person must had relied upon the representation and believe agent has such authority. Lastly, if the third party had relied on the representation and thus goes into the contract based of the detriment, it is then unjust for the principal to deny his liability

Law of Agency

What is an agent?

In or normal life, we are dealing with a lot of agent but most of the time, we are unaware about it. An agency can be created as simple as a bus driver and the passengers. The bus driver being the agent to the bus company and make a contract with the passenger. The legal definition for an agent is, an agent has the authority to make contract with a third party on behalf of another person or legally known as principal. After making the contract, the agent usually drops from the picture and the contract are normally left to the principal and the third party. If any breach occurred, it is left for the principal to deal with the third party. As mentioned above, an agent is just like the bus driver, and middle man. Payment is paid to the company not the bus driver and if anything were to happen, it is the company’s liability.

Remedy under Law of Insurance

Insurance are often viewed as a normal contract with involved a seller and a buyer in exchange of a service, a service which will compensate the buyer if anything were to happen to the insured object either to the insured’s health or item. If a breached of contract were to occurred, the buyer or seller can just simply rescind the contract.

However, the law of insurance is not as simple as it appears. There are actually three types of remedy available and that is to rescind the contract, avoidance for non-disclosure and the doctrine of Subrogation. Rescind of contract is very much common and it merely involve the termination of contract.

The law gets more complicated with the second and third remedy. Non disclosure is a very drastic remedy. If the insurers find out that the insured had failed to disclosure any relevant information which might effects the premium, then the insurers can disclaim their liability and leaves the insured without any protection which he thought he had contracted for. For example in the case of Wootcott v Sun Alliance, Wootcott had insured his house to Sun Alliance. Unfortunately, the house was damaged by the fire but the claim was rejected. The insurer has refused payment on the basis of non disclosure on the part of Wootcott in failing to disclose his past conviction for robbery and other offences. The court held that it was a valid disclaimer.

The third remedy available is the Doctrine of Subrogation. This doctrine has a couple of effects; Firstly, the insured cannot receive more than he is accountable for. Secondly, the insurer may sue any third party who is liable to the insured for the loss in action for tort of contract. The insurance company is entitled to do so for standing in the shoe of the company and sue the third party if he had negligently caused damage. A case on point will be the case of Lister v Romford. Lister, a lorry driver employed by Romford Ice Company negligently injured his father when reversing his lorry. As a result, the company’s insurer paid the damages to the father but then later on sued Lister in the name of Romford. The court held that Lister has breached the employment term for being driving recklessly which eventually cause an accident to his father. Therefore, the insurer can step in the shoes of the insured and benefit from the doctrine.

Maritime Admiralty Law

Article Link: http://www.articlesonline.org/article/law/maritime-admiralty-law-a-short-history--by-anna-henningsgaard/id/5884/

What is Maritime Admiralty Law?

This is a system of law which relates to the affairs of the sea. It covered the topic includes shipping, navigation, waters, commerce, seamen, wharves, piers and docks, insurance, maritime liens, canals, and recreation. Ship hijacking (piracy) also one of the aspect of admiralty.

Example taken from US legal definition:

A ship flying the American flag in the Persian Gulf would be subject to American admiralty law and a ship flying a French flag in American waters will be subject to French admiralty law.

The source of law is determined by the ship's flag. It applies to criminal law regulating to the ship's crew. It said that to apply the law of flag, the ship with the flying the flag must have contact with the nations of its flag.

Maritime Cause Law is referred to those cause that created from the maritime contracts such as between the charter parties, servicing and repairing the ship, navigating and supplying the ships, contracts about the maritime insurance with those owner of the ship.

Function of soft law

Continued with the previous post. This further explained more about the function of soft law.

Soft law instruments are highly favorable by the law makers. The soft nature has finally put itself in a better use. Thus, it is easier to conclude an agreement because the commitments to such law are less strict and limited, also, this encourage parties to consent to more detailed and precise provisions especially in the area of environmental law where developing nations are more reluctant to cooperate and often focus on economic progress. If such agreements are made, the chance of a multilateral agreement to legalized a soft law will be higher. Apart from that, the lack in formality of a treaty, soft law is easier to be amended or abolished. Therefore, it does encourage states to agree on an agreement, without the needs of democratic accountability and avoid the complex process to a treaty. It might not have immediate effect but as discussed above, such as implementation of treaty can really put such soft law in good use. It can also be seen as a stepping stone to address the more sensitive issues and molding it into a multilateral agreement.

Soft law instrument can be viewed as a redundant piece of legislation, without a proper legal personality or the legal effect. However, in practice, soft law is capable of producing good law for the long run and it has become a more favorable legal instrument. It also has the capability in developing customary international law at a faster rate in the form multilateral agreement.

Defective Products

Link: http://www.articlesonline.org/article/law/defective-products--by-anna-henningsgaard/id/5875/

From the article above, who is liable for the defective product? what legal action can we take to sue the company when there is someone get injured by the defective product?

Consumer Protection Act 1999 is a statutes enacted to safeguard consumer rights by (1) enforcing or enhancing product safety standards, (2) increasing the availability of consumer interest related information, and avoiding the use of deceptive marketing approach as explained in BusinessDictionary.com.

In Consumer Protection Act 1999 (CPA), Section 67 defined the meaning of "defect". As for Section 68, it stated the liability for defective products.

1) Where any damage is caused wholly or partly by a defect in a product, the following persons shall be liable for the damage:

a) the producer of the product;

b) the person who, by putting his name on the product or using a trade mark or other distinguishing mark in relation to the product, has held himself out to be the producer of the product; and

c)the person who has, in the course of his business, imported the product into Malaysia in order to supply it to another person.

Other that CPA, common law, under duty of care also can be referred. One of the cases is Donoghue v. Stevenson (1932). This case is about the customer get poisoned by drinking the drinking contents where the ginger beer contained dead snail. He sued the producer for negligence. The producers owed a duty of care for the customer.

Basic requirement for a valid insurance

The basic requirement to a valid insurance is provided in the case of Prudential Insurance.In the case, the court has ruled out three basic requirements which must be fulfilled in order to have a valid insurance. First and for most, the policy must provide some benefit or legal entitlement for the insured on the occurrence of some event. In other words, if the insured items were damage, the insured are bound to benefit from the policy in either getting the goods replaced or monetary compensation.

Secondly, the occurrence must involve some element of uncertainty and the occurrence must be one of which outside the control of the insured. However, there are exceptions to the rule. Firstly, certain events are not able to be insured for example the deterioration of perishable goods or wear and tear. Secondly, Insurance recovered must not be his own wrong unless it is a negligent act. For example, if the insured has recklessly kicked a ball and injured his leg, he will still entitle to an insurance claim although he had deliberately kicked the ball. However, the recklessness can served as a form of negligent and thus allows him to claim for compensation. (not happy think of a better example)

Finally, the occurrence must be one which is prima facie adverse to the interest of the insured. It must be something which the insured wish to protect and also, the insured must have sufficient interest to the subject matter. For example, in the case of Macaura v Northern Assurance. In the case, the insured owned a company, Irish Canadian Sawmills ltd. However, he had insured the timbers in his own name with the respondent company. Unfortunately, a fire broke out and destroyed all the timbers. Macaura then claim for compensation but the court reject the claim and ruled out his interest in the timber. Apparently he had created an insurance in his own name but the timbers belong to the company. Therefore, he has no legal or equitable interest to the timber at all and thus, there is no sufficient interest in allowing a valid claim.

These are the requirements which used to identify a valid insurance. Failure to comply with one of them might make the insurance void.

What is soft law instrument?

Definition for soft law can get tricky. It sometimes defines as a non-binding agreement and it is not readily enforceable per se. Based on Wikipedia.com, quasi-legal instruments which do not have any legally binding force, or whose binding force is somewhat "weaker" than the binding force of traditional law is referred as the term "soft law". On contrary, "hard law" is those that often contrasted with soft law. However, it can take many forms such as declarations, general norms or legal principles.

Theoretically, soft law is a non binding instrument and it is often treated as a piece of agreement with no actual substance. It does not have an immediate effect on the agreement and further ratification is needed in order for the soft law to be a binding rule for a state. The lack of binding effect often relates the rule as merely a form of ethnic which is not enforceable. Aside from being not binding, soft law instrument is often treated as a form of political or moral commitment among state to build up a healthy international relationship. However, this is inaccurate. An agreement is a binding contract; nevertheless, it will contain at least some enforceable legal effect.

Income Tax Act 1967

Issue: Lee Corporation decided to pay a bonus to all employees who have been with the company for more than 6 years. The directors passed the resolution on 10 December 2007 to the effect that all employees who had been with the company for 6 years or more were to be paid a bonus of RM 2,500. The money was actually received by the employees on 5 January 2008.

Answer: : Under Section25(1) of ITA 1967, where gross income from an employment is not receivable in respect of any particular period; and first becomes receivable in the relevant period, it shall when received be treated as gross income of the relevant person for the relevant period; the bonus was not payable in respect of any particular period and therefore, when received by the employee, must be taken into account as gross income for the basis period in which the income was first receivable. The amount was first receivable when it was voted by the directors on 10 December 2007 and is, therefore, to be taken into account in calculating gross income for the year ended 31 December 2007.