LL.B Notes

CLASSIFICATION OF AGENTS

CONTENTS

1.0      Introduction

2.0      Objectives

  • Main Content
  • General and Special Agents
  • Commission Agents
  • Mercantile Agents
    • Factors
    • Brokers
    • Del Credere Agents

4.0      Conclusion

5.0      Summary

6.0      Tutor-Marked Assignment

7.0      References/Further Readings

INTRODUCTION

In view of modern developments in trade and commerce and changing need for specialization certain types of agents have distinguished themselves by name, character and function. Consequently, they have been invested with varying degrees of authority  and power arising from the customs,  trade,  business  or profession  in  which  they belong or operate or simply from their distinct peculiarities.

It has therefore been realized that there is need for such types  of  agents  to  be  specifically distinguished and examined in some detail here for proper understanding and assimilation.

OBJECTIVES

The main objective of this unit is to identify and thoroughly examine th e various types of agents that exist and attempt a through comparison of them with the aim of bringing out their peculiar features as they relate to modern commercial transactions.

MAIN CONTENT

General and Special Agents

Agents are  classified  as  either  “general”  or  “special”  agents.  The  primary distinction  between  the two  types lies in the nature of the authority  given  or  accorded to each and the extent to which their exercise affects the position of the principal.

A General Agent is one who is authorized to  act  for and on behalf of his principal  in  all his affairs in  connection  with  a  particular  kind  of business,  trade  or  profession  or  who represents him in the ordinary course of his own trade, business or profession,  as agent.

An  example  of  a  general  agent  is  a  director  of  a  limited   liability company  who   acts for the purpose of the company’s business. In the same vein, a solicitor, broker or auctioneer who is engaged to perform in the ordinary course of his own business is a  general agent of his employer in relation to that employment.

A special agent on the other hand is one authorized to act for and  on  behalf  of  his principal on or for special occasion. Such an agent may also be required to handle a particular  transaction  or to do a specific  act which  is  not  within   the   ordinary   course of his  trade,  business  or profession.  An  example  of  this  is  a  dealer  in  goods  taken  on hire- purchase for the purpose of executing the necessary hire-purchase documents, paying the initial deposits, taking delivery of the goods and in some cases receiving the periodic payments.

Distinction between General and Special Agents

The distinguishing feature between the two classes of agents lies in the  nature  and character of the authority given or accorded and its scope in relation to third parties.

In this connection, the court observed in Buller v. Maples (1869)9 Wall 766 that:

“The purpose of (a special agency) is a single transaction or a transaction with designated persons …. Authority to buy for the principal a single article of merchandise  by one contract,  or to buy several  articles from a person named,  is  a  special  agency.  But   authority   to   make purchase from any persons  with  whom the agent may choose to deal, or to make an indefinite number of purchases  is a general agency”.

SELF ASSESSM ENT EXERCISE 1

Define and distinguish between general and special agents.

Commission Agents

A commissioned agent is the one to whom certain goods have  been consigned  for  a foreign principal. This  type  of  agent  belongs  to  a recognized  class of commercial  agents whose rights and  obligation  are superimposed  between  the  ordinary relationship of principal and agent on the one hand, and a buyer and seller on the other.

A commissioned agent is therefore saddled with dual responsibility. The first being an  agent to his principal with equal rights  and  obligation  of any other agent. The second is that who does not bind his principal contractually to third  parties.  Instead,  he  stands  in  his own right in the position of principal to such third parties.

The peculiar feature of this category of commercial agents was identified by Lord Blackburn in Ireland v. Livingstone (1872) A.C. 395. In  that  case  he  stated  that  a  person who supplies goods to  a commissioned  agent has no authority to pledge the credit of his principal for them.

SELF ASSESSM ENT EXERCISE 2

Define a commissioned agent and state its roles in commercial transaction.

Mercantile Agents

A mercantile agent is an agent having in the course of his business, as  such  agent,  authority to sell or to consign goods for the purpose of sale, or to buy goods or to raise money on the security of goods.  In essence, when  one is dealing  with a mercantile agent,  it becomes pertinent to inquire whether in the “customary course of the agent’s business he has authority to sell, consign  for  sale  or  to  buy  or  raise  money  on  the security of goods in his possession as such agent.

This is so because there are many kinds of agents who receive or are in possession  of goods, yet it is not their duty to  sale  or consign  them for sale or to  raise money on them.  It is important therefore, that when  one is dealing  with an agent in possession  of goods, one has to consider what sort o f agent he is and what his customary course of business wound be when he is getting in the capacity of an agent.

In Oppenhiemer v. Attenborough (1708) 1 K.B 221 a distinction  between  “customary  case of business “and “ordinary  course of  business”  by LORD  BUCKLEY.  According to the learned judge, a customary course of business speaks of the arrangement made between the owner of goods and his agent. It contemplates that the principal has given possession of the goods to the agent  in  the  course  of  business  which  the  principal knows or believes the  agent  carries  on  as  a mercantile  agent.  It  deals  with  the  situation under which the agent gets his authority.

On the other hand, in ordinary  course  of  business,  has  to  do  with  the stage  at which the agent is going to deal with the goods in his possession with reference to some other person.

There are three types of mercantile agents. These are Factors, Brokers and Del Credere Agents.

Factors

The term “Factor” has not been defined in any statute book, both foreign and local. However, under the common  law  it  has  been  defined  as referring  to  a  mercantile  agent who has been entrusted with the possession of goods for sale only. In Barrin Corrie (1818)2 B & AID. 137, Abott C. J., described a factor as a person to whom goods are consigned for sale by a merchant residing  abroad  or at  a distance away from the place of sale and who normally sells in his own name without disclosing that of his principal.

This definition was qualified in Stevens v. Biller (1884)25 CH. D. 31 where it was held  that an agent does not lose his character of factor by reason of his acting under special instruction from his principal to sell the goods at a particular price and to sell in the principal’s name.

Brokers

A broker is a mercantile  agent  who,  in  the  ordinary  course  of  his  business  is employed to make contact with third parties for the purchase of goods,  or property or for the sale of his principal’s goods  or property of which he is not entrusted  with possession  or document of title thereto. He has been described under the common law as an agent employed  to make  bargains  and  contact between  persons  in  matter  of   trade,  commerce and navigation. He is a mere negotiator between such persons with no  possession of the goods. He lacks the power or authority to determine whether the goods belong to the buyer or seller and no legal or power  to  determine  whether  the  goods should be delivered to the one or be kept by the other.

In essence, a  broker is not entrusted  with the possession of  the goods and has authority  to sell them in his own right or name. Possession or  control  of  the  goods  of  the  principal by the factor distinguishes  him  from  a broker  and  he  is  personally  liable when  contracting  for  a  foreign principal, while the broker incurs no personal liability if he does not exceed his authority or instruction.

Del Credere Agent

A del credere  agent is defined  as one who,  in  consideration  of extra remuneration  called a del credere commission,  guarantees  to  his principal that third parties with whom he enters into contract for and on behalf of  the  principal  shall  duly  pay  any  sums  becoming due  under those  contracts.  The  element  of  extra  remuneration  by  way  of  del credere commission is indispensable to the establishment of a del credere agency and it is this feature that mainly distinguishes it from any other agent.

Therefore, where there are  no words in an agency contract  from  which  it can  be  held  that a higher  reward  is  being  paid  to  the  agent  in consideration  of his  assuming liability for any amounts due from third parties and there is nothing in the  course  of conduct between the agent and the principal from which such  arrangement  can  be  inferred, the agent is not in del credere agent.

SELF ASSESSMENT EXERCISE 3

  1. What are the main features of a mercantile agent
  2. Distinguish between the three major types of a mercantile agent

CONCLUSION

We identified and examined three types of agents. They are: general and special agents, commission agents and mercantile agents. By this revelation, it is apparently clear that students can now easily distinguish the different types of agents  in  commercial transactions.

SUMMARY

This unit has dealt with the following points:

  1. General and Special agents
  2. Commission agents
  3. Mercantile agents
  4. Brokers
  5. Del Credere agents

TUTOR-MARKED ASSIGNMENT

  1. Attempt the definition and distinctions between a general agent and a  special agent.
  2. What are the main features of a commission agent.
  3. Mercantile agent’s only deals with merchants;
  4. differentiate between a Factor, a Broker and a Del Credere Agents.

 REFERENCIES/FURTHER READINGS

Kingsley Igweike (1993). “Nigeria Commercial Law: Agency.” Jos, Nigeria: FAB Educational Books.

Sir William Holdsworth, “A History of English Law,” Vol. IV. American Restatements, Second, Agency, Article.

Friedman,    G.H.L.    (1984).    Law   of    Agency,    7th      Edition.    London: Butterworths

 

Contact Info

Office Address: No. 14, Eyo Etta Street, Calabar Municipality, Cross River State.

Email: info@cjokoyelawview.com cjokoyelawview@gmail.com

Phone: +234 806 981 8927

Phone: +234 808 084 0331

Image

© 2024 C. J. Okoye Lawview & Co. All Right Reserved