Discuss about the Empirical Analysis of Dominant Mode.
According to the Australian Law of Agency, the relationship between the principal and the agent is founded on mutual consent which was held in Garnac Grain Co. Inc. v HMF Faure & Fairclough Ltd [1968] AC 1130 at 1137[1]. In this regard, it is worth mentioning that the consent must be given by either by express or through implied conduct[2]. In UK Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd’s Rep 194 at 196[3], it was held that “the reasonable expectations of an honest man should be protected”. In some cases, the relationship between the principal and agent is referred to as the employer and employee[4]. Therefore, the agent can be referred to as the employee who works for the principal or the employer for a certain payment[5]. The acts of such employee are controlled by the employer and therefore the employer is liable for the acts of omission on the part of the employee during the course of employment which has held in General Accident Fire & Life Assurance Corp v. Pro Golf AssociationGeneral Accident Fire & Life Assurance Corp v. Pro Golf Association, 352 N.E.2d 441 (Ill. App. 1976)[6].
The agent has specific duties towards the principal. These duties can be emphasized as-
In Liley v.Doubleday (1881) 7 QBD 510[8], it was observed that the agent has performed his duty with due care and diligence and in such process has notified the principal about the concerned matters.
The principal is also bound to certain duties towards the agent. These duties can be classified as-
In Lawrence Warehouse Co. v. Twohig, 224 F.2d 493 (8th Cir. Iowa 1955)[9], it was observed that the principal has reimbursed the agent on the ground that the agent has disbursed the amount on behalf of the principal.
It is noteworthy to mention here that, the agent is at the authority to be reimbursed and indemnified by his principal in relation to the expenses incurred by him during the course of performance on behalf of the principal[10]. In this regard, it is important to note that, an agent is entitled to recover the expenses made during the period of agency and such expenses may include travelling expenses, registration fees and similar other expenses. It was held in Weathersby v. Gore, 556 F.2d 1247 (5th Cir. Miss. 1977)[11], that the agent is entitled to recover expenses related to travelling allowances and the authority given to such agent to carry on the duty of care need not necessarily be in writing. It is worth noting that, in some cases the right of reimbursement or indemnity may not be vested on the agent on certain conditions. These conditions can be emphasized as-
The action of the agent is considered to be unauthorized when it is performed exceeding the functions entrusted to him by the principal. The act of the agent can be declared as unauthorized, if it was not previously ratified by the principal.
The agent can be considered to act in negligence, if during the course of agency, he has conducted breach of his agency duties.
The agent shall not have the right to reimbursement, if the act carried by him is unlawful. In B.P. Australia Ltd. V. Federal Commissioner Of Taxation [1965] Hca 35; 112 Clr 386; [1965] Ac 224[12], it was observed the agent was reimbursed by the principal on the ground that the act of such agent was not unlawful and unauthorized.
It can be mentioned that in some cases, the services rendered by the agent to its principal contains an implied term. Due to the presence of an implied term in the agency agreement, the agent may not be in the position to claim remuneration prior to the occurrence of the actual event[13]. If the specified event does not take place, then the agent is not at the authority to claim remuneration from the principal which was held in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337[14].
In the present scenario, it can be observed that Steve was employed by Bianca for the purpose of taking care of the alpacas. In this regard, Steve charged an amount of $100 per week. Therefore, it can be observed that the nature of agency prevailing between Steve and Bianca is constituted on the basis of mutual consent. In this regard, the case of Garnac Grain Co. Inc. v HMF Faure & Fairclough Ltd [1968] AC 1130 at 1137 can be referred where the agreement of agency was based on mutual consent between the principal and the agent. It can be observed that during the course of agency period, Steve performed his job honestly. Therefore, the case of UK Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd’s Rep 194 at 196 can be applied in which it was observed that the expectations of honest men were protected by the law. In the present scenario, there existed a employer-employee relationship between Steve and Bianca, as Steve was working under the instructions of Bianca for a certain amount. In this case, it can be stated that Bianca is liable for the acts of omission that took place on the part of Steve during the course of employment of tenure of agency. Steve was supposed to take care of the alpaca which he diligently performed. Therefore, the case of General Accident Fire & Life Assurance Corp v. Pro Golf AssociationGeneral Accident Fire & Life Assurance Corp v. Pro Golf Association, 352 N.E.2d 441 (Ill. App. 1976) can be referred in this case in which the principal or the employer was liable for the acts of omission on the part of the agent or employee. It can be stated that in the present case study, Bianca is liable to pay the costs which Steve spent on the treatment of the alpaca. It is evident that that an agent owes certain duties to the principal. Therefore, in the present case study Steve had certain duty of care towards Bianca which is to take care of the alpaca. It can be observed that Steve was loyal to Bianca and the motive to save the alpaca was not done with an intention to make secret profit. Steve has performed his duty in the absence of Bianca with due care and diligence. It can also be seen that there was an active effort on the part of Steve to notify Bianca regarding the condition of the alpaca. However, such attempt failed because there was no response on the part of Bianca. It can be noticed that Steve even informed Bianca’s housemate however, he failed in this attempt. Therefore, it can be stated that Steve has performed his duties towards Bianca in relation to the duties of an agent. The case study of Liley v.Doubleday (1881) 7 QBD 510 can be applied in this regard.
The principal owes certain duties to the agent as well. The principal is bound to compensate the agent, if the nature of the services covered by the agent were performed within the right time. It can be observed that Steve has completed the work in the right time otherwise the alpaca could not be saved. Therefore, Bianca is at the duty to compensate Steve. It can be observed that there was disbursement on the part of Steve when he fulfilled the expenses which were needed to carry out by Bianca. Therefore, Bianca is bound to reimburse Steve. There is a duty on the part of the principal to indemnify the agent on the account of the lawful and authorized acts of the agent performed for the best interests of the principal. It can be observed that the act of Steve to save the alpaca was lawful and authorized and it was carried in the best interests of the principal. Therefore, Bianca is liable to indemnify Steve and compensate the amount of the veterinarian’s bill and the cost of transportation. It can be stated that Steve has authorized the surgery for the best interests of Bianca, so therefore Bianca is liable for the payment. The case of B.P. Australia Ltd. V. Federal Commissioner Of Taxation [1965] Hca 35; 112 Clr 386; [1965] Ac 224 can be applied because Steve was not negligent, unlawful or unauthorized.
Conclusion:
In the conclusion, it can be stated that Steve is not liable to pay the amount of $3500 for the expenses towards the veterinarian’s bill and the transportation costs.
References:
B.P. Australia Ltd. V. Federal Commissioner Of Taxation [1965] Hca 35; 112 Clr 386; [1965] Ac 224.
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.
Garnac Grain Co. Inc. v HMF Faure & Fairclough Ltd [1968] AC 1130 at 1137.
General Accident Fire & Life Assurance Corp v. Pro Golf AssociationGeneral Accident Fire & Life Assurance Corp v. Pro Golf Association, 352 N.E.2d 441 (Ill. App. 1976).
Lawrence Warehouse Co. v. Twohig, 224 F.2d 493 (8th Cir. Iowa 1955).
Liley v.Doubleday (1881) 7 QBD 510.
UK Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd’s Rep 194 at 196.
Weathersby v. Gore, 556 F.2d 1247 (5th Cir. Miss. 1977).
Easthope, Hazel, and Bill Randolph. “Principal–agent problems in multi-unit developments: The impact of developer actions on the on-going management of strata titled properties.” Environment and Planning A48.9 (2016): 1829-1847.
Neupane, Arjun, Jeffrey Soar, and Kishor Vaidya. “Anti-corruption capabilities of public e-procurement technologies: principal-agent theory.” Business law and ethics: Concepts, methodologies, tools, and applications (2015): 355-373.
Oliver, Justin, and Paul Schoff. “Agency and Competition Law in Australia Following ACCC v Flight Centre Travel Group.” Journal of European Competition Law & Practice 8.5 (2017): 321-328.
Riaz, Zahid, Sangeeta Ray, and Pradeep Ray. “The Synergistic Effect of State Regulation and Self-Regulation on Disclosure Level of Director and Executive Remuneration in Australia.” Administration & Society 47.6 (2015): 623-655.
Hedges, Jasper, George Gilligan, and Ian Ramsay. “Banning orders: An empirical analysis of the dominant mode of corporate law enforcement in Australia.” Sydney L. Rev. 39 (2017): 501.
Daly, Angela. “The introduction of data breach notification legislation in Australia: a comparative view.” Computer Law & Security Review (2018).
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