- •Commercial Law
- •Contents
- •Preface
- •Abbreviations
- •Table of Statutory Provisions
- •Table of Cases
- •1 Introduction
- •1 Introduction
- •2 What is agency?
- •3 Nature and characteristics of agency
- •4 The different types of agency
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 The authority of an agent
- •3 Agency by ratification
- •4 Agency of necessity
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 Duties of an agent
- •3 Rights of an agent
- •4 Commercial agents and principals
- •5 Disclosed agency
- •6 Undisclosed agency
- •7 Termination of agency
- •8 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of the sale of goods
- •4 Equality of bargaining power: non-consumers and consumers
- •5 Impact of the European Union
- •6 Contract of sale
- •7 Contracts for non-monetary consideration
- •8 Contracts for the transfer of property or possession
- •9 Recommended reading
- •1 Introduction
- •2 Background
- •3 Sale of Goods Act 1979, section 12: the right to sell
- •4 Sale of Goods Act 1979, section 13: compliance with description
- •5 Sale of Goods Act 1979, section 14(2): satisfactory quality
- •6 Sale of Goods Act 1979, section 14(3): fitness for purpose
- •7 Sale of Goods Act 1979, section 15: sale by sample
- •8 Exclusion and limitation of liability
- •9 Acceptance
- •10 Remedies
- •11 Recommended reading
- •1 Introduction
- •2 Background to the passage of property and risk
- •3 Rules governing the passage of property
- •4 Passage of risk
- •5 The nemo dat exceptions
- •6 Delivery and payment
- •7 Remedies
- •8 Recommended reading
- •1 Introduction
- •2 Background
- •3 Provision of Services Regulations 2009
- •4 Supply of Goods and Services Act 1982
- •5 Recommended reading
- •1 Introduction
- •2 Background
- •3 Electronic Commerce (EC Directive) Regulations 2002
- •4 Distance selling
- •5 Recommended reading
- •Introduction
- •1 Introduction
- •2 CIF contracts
- •3 FOB contracts
- •4 Ex Works
- •5 FAS contracts
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction and background
- •2 Structure and scope
- •3 UNIDROIT Principles of International Commercial Contracts
- •4 Conclusion
- •5 Recommended reading
- •1 Introduction and background
- •2 Open account
- •3 Bills of exchange
- •4 Documentary collections
- •5 Introduction to letters of credit
- •6 Factoring
- •7 Forfaiting
- •8 Conclusion
- •9 Recommended reading
- •1 Introduction
- •2 Hague and Hague-Visby Rules
- •3 Charterparties
- •4 Time charterparty
- •5 Common law obligations of the shipper
- •6 Common law obligations of the carrier
- •7 Bills of lading
- •8 Electronic bills of lading
- •9 Conclusion
- •10 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of negligence
- •4 The move to strict liability
- •5 Types of defect
- •6 Developments in strict liability
- •7 Recommended reading
- •1 Introduction
- •2 Personnel
- •3 Meaning of ‘product’
- •4 Defectiveness
- •5 Defences
- •6 Contributory negligence
- •7 Recoverable damage
- •8 Limitations on liability
- •9 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Enforcement strategy
- •4 Criminal law controls
- •5 Civil law enforcement
- •6 Recommended reading
- •1 Introduction
- •2 Scope of the 2008 Regulations
- •3 Prohibition against unfair commercial practices
- •4 Codes of practice
- •5 Misleading actions
- •6 Misleading omissions
- •7 Aggressive commercial practices
- •8 Commercial practices which are automatically unfair
- •9 Offences
- •10 Recommended reading
- •1 Introduction
- •2 Background
- •3 Controls over misleading advertising
- •4 Comparative advertising
- •5 Promotion of misleading or comparative advertising
- •6 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 History of banking regulation: early policy initiatives
- •3 New Labour and a new policy
- •4 The Financial Services Authority
- •5 The Coalition government
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction
- •2 What is a bank?
- •3 What is a customer?
- •4 Bank accounts
- •5 Cheques
- •6 Payment cards
- •7 Banker’s duty of confidentiality
- •8 Banking Conduct Regime
- •9 Payment Services Regulations 2009
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 European banking regulation
- •3 The Financial Services Authority
- •4 Financial Services Compensation Scheme
- •5 Financial Ombudsman Scheme
- •6 Financial Services and Markets Tribunal
- •7 The Bank of England
- •8 Bank insolvency
- •9 Illicit finance
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 Evolution of the consumer credit market
- •3 Consumer debt, financial exclusion and over-indebtedness
- •4 Irresponsible lending
- •5 Regulation of irresponsible lending
- •6 Irresponsible borrowing
- •7 Ineffective legislative protection for consumers
- •8 A change of policy
- •9 Lessons from the United States
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 Crowther Committee on Consumer Credit
- •3 Consumer Credit Act 1974
- •4 Formalities
- •5 Cancellation of agreements
- •7 Documentation of credit and hire agreements
- •8 Matters arising during the currency of credit or hire agreements
- •9 Credit advertising
- •10 Credit licensing
- •11 Unfairness test
- •12 Other powers of the court
- •13 Financial Ombudsman Service
- •14 Enforcement
- •15 Consumer Credit Directive
- •16 Conclusion
- •17 Recommended reading
- •Bibliography
- •Index
47 |
4â Commercial agents and principals |
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court held that, in this instance, the agent had not gained a lien over the insur- |
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ance policy.112 |
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There is one further requirement which needs to be satisfied if the agent is |
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to obtain a lien over the principal’s property: the agency agreement must not |
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exclude this right either expressly or impliedly. In Re Bowes, a client deposited a |
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life insurance policy with his banker with an express stipulation that he was not |
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to be levied with an overdraft that exceeded £4,000.113 The court held that the |
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communication between the client and the banker prevented the latter from |
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acquiring a lien. |
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The agent will lose any lien he possesses over the principal’s goods or prop- |
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erty when the principal pays any outstanding monies owed to the agent. |
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Markesinis and Munday noted that there are two other situations in which an |
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agent may lose his lien: first, the agent may elect to waive his rights;114 secondly, |
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the agent will lose the right if he chooses to part with the property.115 |
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Q3 What are the rights of an agent? |
4â Commercial agents and principals
As outlined above, the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053, impose compulsory obligations on a commercial agent. The Regulations define a commercial agent as ‘a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person (the “principal”), or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of that principal’.116 The Regulations specify that a commercial agent does not include ‘(i) a person who, in his capacity as an officer of a company or association, is empowered to enter into commitments binding on that company or association; (ii) a partner who is lawfully authorised to enter into commitments binding on his partners; (iii) a person who acts as an insolvency practitioner’.117 Under the 1993 Regulations, a principal owes the commercial agent the following duties, which must be exercised dutifully and in good faith:
a principal must (a) provide his commercial agent with the necessary documentation relating to the goods concerned; (b) obtain for his commercial agent the information necessary for the performance of the agency contract, and in Âparticular notify his commercial agent within a reasonable period once he anticipates that the volume of commercial transactions will be significantly lower than
112 The principle was also followed in Houghton v. Matthews (1803) 3 B. & P 485, as cited in Markesinis and Munday, above n. 44, at 147.
113 Re Bowes, Earl of Strathmore v. Vane (1886) 33 Ch. D 586.
114 See, e.g., Weeks v. Goode (1859) 6 CBNS 367 and Forth v. Simpson (1849) 13 QB 680. 115 Markesinis and Munday, above n. 44, at 149.
116 SI 1993/3053, reg. 2(1).
117 An insolvency practitioner is defined in Insolvency Act 1986, s.388.
48 |
Relations between a principal and agent |
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that which the commercial agent could normally have expected … A principal shall, in addition, inform his commercial agent within a reasonable period of his acceptance or refusal of, and of any non-execution by him of, a commercial transaction which the commercial agent has procured for him.118
The 1993 Regulations also impose a series of obligations on the commercial agent, who is required to:
look after the interests of his principal and act dutifully and in good faith … in particular, a commercial agent must (a) make proper efforts to negotiate and, where appropriate, conclude the transactions he is instructed to take care of;
(b) communicate to his principal all the necessary information available to him; (c) comply with reasonable instructions given by his principal.119
It is important to note that neither the principal nor the commercial agent is entitled to derogate from the respective duties they owe to each other.120 Furthermore, the principal and commercial agent are entitled to ‘receive from the other, on request, a signed written document setting out the terms of the agency contract including any terms subsequently agreed’.121
The 1993 Regulations also specify minimum periods of notice for the termination of the agency agreement by either party. Under regulation 15, ‘where an agency contract is concluded for an indefinite period either party may Âterminate it by notice’. The period of notice required is:
(a) one month for the first year of the contract; (b) two months for the second year commenced; (c) three months for the third year commenced and for the subsequent years; and the parties may not agree on any shorter periods of notice.
Under the Regulations, where there is no agreement between the parties regarding the payment of the commercial agent, the agent will be permitted such payment as is normally provided for such agents, and where no such practice exists, the commercial agent is entitled to a reasonable level of compensation.
The 1993 Regulation provide for a commercial agent to be indemnified or compensated as a result of termination of the agency agreement.122 In particular, the Regulations state that a commercial agent is entitled to indemnity if and to the extent that:
(a) he has brought the principal new customers or has significantly increased the volume of business with existing customers and the principal continues to derive substantial benefits from the business with such customers; and (b) the payment of this indemnity is equitable having regard to all the circumstances and, in particular, the commission lost by the commercial agent on the business transacted with such customers.123
118 |
SI 1993/3053, reg. 4.â 119â Ibid. reg. 3. |
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120 |
Ibid. reg. 5.â |
121â Ibid. reg. 13. |
122 |
Ibid. reg. 17.â |
123â Ibid. reg. 17. |