AGENCY OF NECESSITY

 CONTENTS

1.0      Introduction

2.0      Objectives

• Main Content
• Agency by Necessity?
• Doctrine of Deserted Wife’s Agency of Necessity
• Conditions for Necessity of Agency

4.0      Conclusion

5.0      Summary

6.0      Tutor-Marked Assignment

7.0      References/Further Readings

INTRODUCTION

In a restricted range of instances, an agency may arise as a matter of law so the agent is authorized to bind the principal to the extent required by that instance without prior authority from them, or ratification by, the principal. This usually occurs in emergency situations.

OBJECTIVES

The significance of an agency created as a result of emergency is that it can bind a principal to a third party or allow an agent to claim reimbursement for expenses incurred, or provide a defence to a claim in the tort of conversion. This will  be the focus of this  unit.

Main Content

What is Agency by Necessity?

Generally, the courts are reluctant to find that an agency of necessity exists because it imposes obligations on someone who has not given consent to the supposed agent to so  act.

The agency of necessity may arise where certain condition are fulfilled.

 Peluola’s property must be in Ade’s possession as the result of an existing legal relationship, such as a contract of This will also  include  claims  by strangers such as someone who finds the goods.

1. Ade is unable to obtain instructions from the owner
2. An emergency threatens the property. It is not sufficient for Ade to show that Peluola’s property is causing Ade hardship or inconvenience.
3. Ade takes action in good faith and that action is commercially reasonable, proportionate and in the interest of Peluola

See further Sachs v. Miklos (1948)2 K.B.23 Prager v. Blastpiel, Stamp and Hsacock Ltd (1924)1 K.B 566. It is therefore pertinent to state that since it is a characteristic of an agent that they can affect the legal relations of the principal, it might be argued that those agents who only have the right to claim expenses or to defend an action are not true agents of necessity and that the only true agency of necessity is the master of a ship  who  acts to  save the ship or its cargo in an emergency.

SELF ASSESSM ENT EXERCISE 1

Explain in detail the concept of agency of Necessity. 

Doctrine of Deserted Wife’s Agency of Necessity

Another classical example of agency of necessity  arising  out  of  an  existing  or  subsisting legal duty concerns a deserted wife. A deserted wife is an agent of necessity endowed by law with authority to pledge her husband’s credit for necessaries.

The locus classicus in respect of this point of law is the case of Phillipson  v.  Hayter (1870) L.R.6 C.P.38 where Wiles, J, while explaining the rule stated as follows:

“What the law infers is this, that his wife  has authority to contract  for things that are really necessary and suitable to the style in which the husband chooses to live, in so far as the articles fell fairly within the domestic department which is ordinarily confined to the  management  of  the wife.”

This principle was applied and approved by the Court of Appeal (North Central State) Kaduna, in the Nigerian case of Hutchinson v. Madam Olaide (1970) N.N.L.R. 31 where  it was held that a wife whose husband’s cruelty forced her to leave him was entitled to pledge his credit for necessaries. It was further  held  that  this  is  subject  to  the wife’s own means and earning power and that it was limited to pledging the husband’s credit for goods supplied or services rendered but not extended to borrowing money.

However, there are certain conditions that are required by law to be fulfilled before a deserted wife can successfully set up an agency of necessity. These conditions are:

1. That the husband (Principal) and the wife (agent)  were legally married and cohabiting as husband and wife at the material time.
2. That there was an actual or constructive  desertion  of  the wife by the husband
3. That the credit pledged by the wife was for  chattels  other than money and for the domestic requirements
4. That such expenditure  was  suitable  for  her  style  or situation in life or for what she was used to while she was living  with her husband.
5. That there  was   no   other   credit   available   to   her   for her maintenance either  through  her  own  earning  power  or  under a court order.

SELF ASSESSMENT EXERCISE 2

A wife is at liberty to bind her husband for cost of necessaries incurred by her. Discuss.

Conditions for Necessity of Agency

The existence or otherwise of an agency of authority is dependent on the fulfillment of  the following conditions by the supposed agent. These are:

1. That there is an emergency situation necessitating instantaneous action
2. That it was impossible for the claimed agent to communicate with the presumed principal at the material time
3. That the action taken was reasonably necessary having regard to the circumstances in the case
4. That the claimed agent acted bona fide and in the interest of the presumed principal.

A claimed agent must prove the existence of all these conditions cumulatively before reliefs sought in respect of expenses or damages accruing to him as a result of the agency situation can be sustained.

SELF ASSESSMENT EXERCISE 3

Reliefs sought by an agent of necessity are granted as of right. Do you agree?

CONCLUSION

From the foregoing it is believed that learners would have been able to know the various ways by which a contract of agency is created. A valid agency will be held to  subsist  where any of the foregoing situations is proved to exist.

SUMMARY

This unit has taught learners:

1. What is meant by competence of parties to be an agent?
2. The various ways by which an agency is created
3. The distinctive features in the various ways by which an agency contract is created.

TUTOR-MARKED ASSIGNMENT

1. Examine in brief what you understand by competency of parties in an agency relationship.
2. Creation of agency follows a particular form. Do you agree?.
3. What are    the    distinguishing    factors   of   the   various    modes   of creation of agency?

REFERENCES/FURTHER READINGS

Sir William Holdsworth, “A History of English Law,” Vol. IV.

Walker, D.W. (1980). “The Oxford Companion to Law” London: Butterworths. American Restatements, Second, Agency, Article.

Friedman,   G.H.L.   (1984).    Law   of   Agency,   7th     Edition. London: Butterworths. Companies and Allied Matters Act (1990). Laws of the Federation of

Nigeria.