The Issue and Relevant Rules

The issue which have been analyzed in the situation is that whether Rogers has the right to claim compensation from GARC for the loss has caused to him in relation to the cucumbers.

An agency can be created in case of emergency or necessity. This means that a person can be termed as an agent of the other person even if they have not been appointed due to some situations.

There are three conditions which have to be fulfilled for the creation of an agency by necessity. These conditions had been illustrated by the case of Prager v. Blatspiel, Stamp and Heacock Ltd [1924] 1 KB 566. The case provided that there has to be a genuine necessity and the agent has to act bona fide. The three situations state that the circumstances must be such that it is not possible for the defendant to get the instructions of the plaintiff, the action of the person has to be necessary and the agent had to act in good faith.

This form of agency is created in situation where a person is provided a responsibility about the property of another person and it becomes compulsory to indulge in an act to preserve the property in context even where there is no express authority as provided by the case of Biberfield v. Berens [1952] 2 All ER 237.

In the landmark case of Springer v Great Western Railway Company [1921] 1 KB 257, there had been an agreement between the defendant company and the plaintiff that the former would carry the tomato of the plaintiff to London from Channel Island. In this situation the tomatoes had to be carried by ship till Weymouth and thereby via train to London. The ship had been stopped at the channel island for a period of three days due to the weather. When the ship came to Weymouth as the employee of the defendant were not working it delayed the process of unloading by two days. At the time a few tomatoes were rotten. The defendant sold the tomato as they had the conclusion that the defendant cannot reach their destination in good condition. The plaintiff sued the defendant when they were provided knowledge about the same. In this case it had been stated by the court that the plaintiff had the right to claim damages from the defendant. This is because the defendants should have communicated to the plaintiff about their course of action when the ship had arrived at Weymouth. As there had been a failure on the part of the defendant to communicate the situation to the plaintiff where it was possible, there is no agency of necessity.

Relevant Australian Case law

The fulfilment of the conditions have been seen in the case of Great Northern Railway Co. vs. Swaffield (1874) LR 9 Exch 132 where the court stated that as the defendant could not contact the plaintiff and had no other option to rather than keeping the horse in a stable in good faith there is an agency of necessity.

It has been provided in the given situation that there has been an agreement between GARC and Roger by which they are provided the duty of transporting cucumbers owned by Roger to Melbourne. An agency can be created in case of emergency or necessity. This means that a person can be termed as an agent of the other person even if they have not been appointed due to some situations. In the present situation it can be stated through the application of the case of Biberfield v. Berens as agency is created in situation where a person is provided a responsibility about the property of another person and it becomes compulsory to indulge in an act to preserve the property in context even where there is no express authority, here also there are chances for the creation of an agency by necessity. It has been further provided by the situation that the cucumbers were to be transferred via train till Perth and then via truck till Melbourne. However due to bad weather the truck from Adelaide to Melbourne got delayed. The cucumbers were to be sold at a stall which Roger had hired at the Victorian Fruit and vegetable market. However when the truck had crossed the state border between Melbourne and South Australia the condition of the cucumbers were found to be bad. The cucumbers were thus sold before being delivered to the destination. As stated in the case of Prager v. Blatspiel, Stamp and Heacock Ltd there are three conditions which have to be satisfied for the creation of an agency by necessity. These are “the circumstances must be such that it is not possible for the defendant to get the instructions of the plaintiff”, ”the action of the person has to be necessary” and “the agent had to act in good faith”.  In the present situation a situation of emergency can be identified. This is because the cucumbers were getting rotten before they had arrived to their destination. If the cucumber were not sold it would result in a total loss. In addition it can also be provided that the decision of selling had been taken in good faith as there is no personal interest of the seller. However it has to be analyzed whether the circumstances were such that it is not possible for the defendant to get the instructions of the plaintiff. This is because for the same reason in a case which had similar facts to the present situation the case ruled that there was no agency of necessity and the plaintiff is liable to make a claim for compensation. In case of Springer v Great Western Railway Company, the court ruled in favour of the defendant even where there was a condition of necessity and the person acted in good faith, the defendant did not seek to contact the plaintiff to get proper instructions. In this situation also it can be stated that this condition has not been satisfied. This is because when the truck had crossed the state border between Melbourne and South Australia the condition of the cucumbers were found to be bad and the cucumbers were thus sold before being delivered to the destination, the defendants could have informed the same to the plaintiff (Rogers) in order to obtain instructions from him as to what actions are to be carried out next. However as there had been no such attempts made by the defendants the agency of necessity will not be created.

Application to the Given Situation

In addition as BTA have been provided express authority by GARC, all actions which have been committed by BTA will bind GARC. Thus through the application of the case of Springer v Great Western Railway Company it can be clarified that there is no agency of necessity being created between GARC and Rogers and as BTA is the agent of GARC, Rogers have the right to make a claim GARC for the loss which have been incurred by him.

Conclusion

In conclusion, it can be stated that as there is no creation of an agency of necessity and thus GARC has the obligation of compensating Rogers for the losses incurred by him.

2. An agency can be created through an express or implied authority or an apparent authority.  An express authority is a form of authority when the principle appoints the agent to carry on a particular work. On the other hand an implied authority is an authority where the principal has not appointed the agent to do a particular work but the third party under the authority provided to the agent believes that there is authority and thus gets into the contract.  For instance, if a waiter conveys to the consumer that they will provide them will a free beverage if they purchase an entree a contract is made between the waiter on behalf of the restaurant and the consumer as they are representing the restaurant. The authority provided to the waiter is implied via the fact that they have been selected by the restaurant to interact with the customers. This would be irrespective of whether or not the restaurant gets into the transaction eventually as it is expected by the customer that the transaction would be completed by the waiter. In situation where there the restaurant manager informs the customer that there has been a mistake made by the waiter and there is no free beverage with purchase of entry, it would be a breach of contract directly on the part of the restaurant which has been made on their behalf by the waiter. The restaurant would have the option of penalizing the employees, however they would need to abide by the contract which has been formed between the customer and the waiter. The same situation would be applicable on more extreme or complex circumstances.

Contrary to an implied authority, an express authority is clearly stated as granted to the agent by the principal either in writing or orally. On the other hand an apparent authority which is also called ostensible authority is present where the actions of the principal would make a third party believe that the agent had been provided with an authority by the principal either in expressed or implied manner (DeMott, 2015).

Conclusion

The provisions of implied authority have been discussed in various cases. In these cases the judges either found that implied authority has resulted out of an express authority or there was no authority present on the party of the agent to indulge in an action. One of such cases such cases is the case of Watteau v Fenwick (1893) 1 QB 346. In this case the hotel had appointed a general manager who had the responsibility of taking care of the operations of the hotel. The plaintiff had supplied cigars to the restaurant. The cigars had been supplied by the plaintiff to the manager. The plaintiff was not aware of the involvement of the defendant company. The plaintiff claimed the money for the cigar from the defendants. The defendants denied that they had provided any authority to the manager to purchase the cigar. In this case it had been stated by the court that the defendant company had portrayed the manager as having general authority to the world and thus through the application of the principles of implied authority, they would be liable to pay the plaintiff. In the same matter it had been stated by the court of appeal that once it had been provided that the defendant was actually a principal, the general rule for agency would be applicable, even where the plaintiff was not aware of such facts. The courts made it clear that all acts of the agents are binding upon the principal if they have are provided to an agent having similar nature of work. This would also be present in case the agent was actually not acting within the authority provided by the agent (Saintier, 2017).

Thus from the above discussion it can be concluded that an express authority can result out in an implied authority. This can take effect in business situations where the principal has provided general authority to the agent. An agency can be created through an express or implied authority or an apparent authority (Cohen, 2017).  An express authority is a form of authority when the principle appoints the agent to carry on a particular work. On the other hand an implied authority is an authority where the principal has not appointed the agent to do a particular work but the third party under the authority provided to the agent believes that there is authority and thus gets into the contract.  Thus express authority may give rise to implied authority in situation a general authority is provided. However in situation where the third party is made aware of the fact that the agent does not have the authority to get into a particular transaction and being aware of the fact the party goes into a contract with the agent, no implied authority will be present.

References

Biberfield v. Berens [1952] 2 All ER 237.

Cohen, G. M. (2017). Law and Economics of Agency and Partnership. The Oxford Handbook of Law and Economics: Volume 2: Private and Commercial Law, 399.

DeMott, D. A. (2015). Agency in the Alternatives: Common-Law Perspectives on Binding the Firm. Research Handbook on Partnerships, LLCs and Alternative Forms of Business Organizations, 81.

Great Northern Railway Co. vs. Swaffield (1874) LR 9 Exch 132

Prager v. Blatspiel, Stamp and Heacock Ltd [1924] 1 KB 566

Saintier, S. (2017). Commercial agency law: A comparative analysis. Taylor & Francis.

Springer v Great Western Railway Company [1921] 1 KB 257

Watteau v Fenwick (1893) 1 QB 346