Types of Agency
Agency Arrangements
An agency relationship exists where one person (or company) has authority to bind another person (or company) legally, either generally or in relation to certain matters. The agent is the person with authority to undertake legally binding acts on behalf of another. The person who is legally bound by the agent, and on whose behalf the agent acts is called the principal.
The agent’s power and authority will depend on the terms of his appointment. An agent may have the power to bind his principal in relation to contracts and other legal matters. He may have the authority to transfer property and undertake other legally significant acts.
There may be an infinite variety of terms of appointment. Most things which a principal may lawfully do himself may be done by an agent on his behalf.
A principal has the freedom to confer authority in any terms he sees fit, subject only to the constraint of the general law and legality. There are some limited constraints on a person’s ability to delegate, which arise from public policy, such as in the area of wills and family law.
Co-principals may appoint an agent jointly. The agent may account to any of them. He need not account to them separately. The principal may appoint co-agents, either jointly or severally. Authority may be given jointly, severally, or jointly and severally.
Companies
Agency is of key importance in relation to companies. Companies must act through agents. They have no separate physical existence. When considering whether an individual within the company has authority to enter transactions on its behalf, the law of agency is applied.
The board of directors will commonly delegate the power to manage the company to a managing director. The board of directors has the pre-eminent power to conduct the company’s affairs, subject to their responsibility to the shareholders collectively.
Individual company directors may have a certain level or authority to act for the company. Companies commonly appoint a managing director with the wide powers.
The indoor management rule allows third parties in their dealings with companies, to assume that all the requisite internal procedures for the conferral of authority have been followed.
Partners
Agency law is important in the context of partnerships. Partners are a collective. Individual partners may bind the partners collectively.
Each partner is deemed the agent of the firm under the Partnership Act. Each partner has authority to bind the partners collectively, in relation to matters within the scope of the partnership business.
Persons who are not partners may be held out as partners to a third-party. In accordance with general principles, the apparent partner, whom the partners hold out to be a partner, may bind them as if he was a partner/agent.
Employees
Employees will often be agents of their employer for matters within the scope of their employment. They may be expressly appointed to certain positions, They may have authority which arises by implication from their role.
The employee’s authority to bind his employer is likely to be limited to the relevant purposes.The scope of this agency will usually be apparent from a common-sense consideration of the nature of the employment concerned and the employee’s role in it.
An employee may have authority to enter contracts for services or to sell goods. He may bind his employer to the terms of the relevant contract. Common sense will usually point to the boundaries of his authority. Where the employer holds the employee as having a greater level authority, it may be bound to that greater extent.
Attorney
A power of attorney is the grant of power by one person (the donor) to another (the donee) to undertake legally significant acts on behalf of the donor. A power of attorney must be in writing, signed by the donor and witnessed.
The Powers of Attorney Act removed the requirement that the grant of a power to dispose of property be under seal. In the case of a company or other corporation, it must comply its own constitutional requirements, for execution of a document as a deed.
The person granted power under a power of attorney, the donee, may if given authority, do any act and execute and deliver any instrument as a deed in his own name, which the donor could himself have done, within the scope of the authority. Every such instrument is valid as if done by the donor himself. A general power of attorney may be giving by using the short statutory format.Agents by Estoppel
Agents by Estoppel
Agency may arise under principles of estoppel. Where a person is held out as having a particular authority and a third party acts in reliance on the ostensible or apparent authority, the “principal” who has held him out is prevented or “estopped” from denying that he has authorised the ostensible agent.
Where a principal or another on his behalf, makes an express or implied representation that another person, the apparent agent, has authority on his behalf and a third party relies on this representation, the principal will be bound.
The principal or another authorised party must have led the third party to believe that the agent had authority. Where agency arises in this manner, the third-party may enforce the contract or transaction against the principal. However, the principal may not enforce against the third party, unless he ratifies the agent’s acts.
Agent of Necessity
An agency of necessity may arise where a duty is imposed on a person to act on behalf of another in the absence of a contract or appointment. A stranger will rarely become an agent due to circumstances alone. There will commonly be a pre-existing contractual relationship between the principal and agent, the scope of which is expanded by the agency of necessity.
Agency of necessity will typically arise in an emergency, where urgent action is required to prevent irreparable harm or damage. It may arise out of a legal or moral relationship between the parties. The principle is relatively limited and generally arises in urgent situations arising at sea, where prompt action is required to save goods, cargo or life.
The agent must be incapable of communicating with his principal. The course taken must be necessary and be the only reasonable and prudent course available. The agent must act bona fide in the interests of the principal and others concerned.
Commercial Agents
An agent may be a general agent, with authority in the ordinary course of its business or profession to act or do acts of a particular class on behalf of its principal. A general agent is a person who has authority on behalf of another in relation to a wide range of matters, such as the authority to conduct a particular business.
A special agent may only have authority in relation to one or a few matters. He may be authorised in respect of a particular type of business. In some cases, he may be authorised to do everything that the principal may do. A special agent is one whose authority applies on special occasions or particular purposes, which are not within the ordinary course of his business or profession
Commercial agents as defined, enjoy special protection under European Union legislation. They must be formally appointed. They are self-employed intermediaries with continuing authority to negotiate the sale and purchase of goods on behalf of another. They do not include persons who do so as directors, employees, and partners.
Commercial agents are representatives of another business, in a broad commercial sense. They typically represent a domestic manufacturer or distributor in foreign jurisdiction and market. The commercial agent deals in the other’s goods. Depending on the circumstances, they may be general agents or special agents, in the above common law sense.
Pseudo- Agents
In many situations, the word, “agent,” is used in relation to persons who are not in fact agents. Distributors, franchisors, et cetera, are commonly called agents or sole agents when they distribute goods. However, they are not in fact agents and are in business on their own account.
Distributors typically sell goods on behalf of a particular manufacturer. They generally have an obligation to purchase their requirements from that party exclusively, in return for certain rights and privileges.
A franchisee is similar to a distributor but is more commonly found in relation to the provision of services. The franchisee undertakes the style, trademark, get up, and intellectual property of the franchisor. He obtains the benefit of the existing goodwill, support, and common marketing.
The exact nature of the marketing relationship will determine legal rights and obligations. Where a “true” agent sells goods on behalf of its principal, the agent is not liable, and the principal is directly liable.
In contrast, distributors and franchisees are almost invariably, the persons who are legally liable on the contracts with their customers. If the distributor or franchisee becomes insolvent or cannot perform its obligations, the purchase cannot look to the manufacturer or franchisor for support.
Mercantile Agent and Factors
A mercantile agent is one who in the customary course of his business, has authority to sell goods, to consign goods for sale, to buy good or to raise money on the security of goods. Mercantile agents have special privileges under the Factors Act 1889. They may transfer the title to goods which they hold in the course of their business, notwithstanding the absence of title.
A factor is a mercantile agent who is given possession of goods or documents of title in the ordinary course of a business. A broker is a mercantile agent who in the ordinary course of his business, makes contracts for the purchase or sale of goods or property.
A factor is an agent who sells goods belonging to his principal, in return for a commission. He deals with his principal’s goods in order to find a buyer or seller. The description as a “factor” is found in some important older legislation but has largely dropped out of use.
Del Credere Agents
A del credere agent negotiates and enters contracts for the sale of the principal’s goods to third parties on credit. He guarantees due performance and payment by the third party, to his principal. An additional commission or fee is usually charged.
This facilitates sales to third-parties by principals with whom they do have an existing relationship or in whom they would not have sufficient trust and confidence. The del credere agent undertakes to indemnify his principal against loss arising the third party buyer’s default in payment.
A del credere arrangement may arise from express or implied contract. He need not be appointed in writing, notwithstanding the Statute of Frauds, which requires written signed evidence of a guarantee.
References and Sources
Irish Sources
Commercial Law, Fidelma White 2nd Ed. Thomson Round Hall, Dublin, 2015.
Commercial Law Michael Forde, 3rd Ed Tottel, Haywards Heath, 2005
UK Sources
Principles of the Law of Agency Howard Bennett 2013,
Agency 3e: Law & Principles (3rd Revised Ed) Munday, Roderick;
Bowstead & Reynolds on Agency, 20th Ed. Professor Peter G. Watts
The Law of Agency Friedman
Cases
Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd
[1971] 2 QB 711
Lord Denning MR
“ Mr. Hames, who appears for the Fidelis company, takes two points. His first point is that the contracts for hire were made with Mr. Bayne personally and not with the company: and so the company are not liable on them. He points out, quite rightly, that, on the face of each of these hiring agreements, the hirer is specifically stated to be “R. L. Bayne.” He says that they were regular documents, duly executed, which were intended to embody the agreement that was made: and Belgravia cannot gainsay them. I was much impressed by that argument. It appears that in these “self-drive hire” transactions, Belgravia, for insurance purposes, always want the driver to be named as the hirer. So they deliberately inserted Mr. Bayne’s name as the hirer. Can they now go back on their own documents? Belgravia have to prove that the Fidelis company was in fact the party which hired the cars. For this, they have to go outside their own regular hiring agreements. Can they do this? I think they can. I regard these hiring agreements as part and parcel of a contract contained in correspondence: so much so that you must not look at the hire agreement alone, but at all that took place. “In order fairly to estimate what was arranged and agreed, … you must look at the whole of that which took place and passed between them”: see Hussey v Horne-Payne (1879) 4 App Cas 311, per Earl Cairns LC at p 316.
Applying those considerations, it is clear that these cars were hired as a result of letters which described Fidelis Furnishing Fabrics Ltd. as the contracting party. The cars were booked by letters written on the paper of the Fidelis company and signed by Mr. R. L. Bayne, with the words underneath “Company Secretary.” References were given as to the credit and standing of the Fidelis company. In these circumstances, the hiring agreements were mere machinery for carrying the correspondence into effect. One of them was overstamped with the signature: “Fidelis Furnishing Fabrics Ltd. – R. L. Bayne, Company Secretary.” Clearly that agreement was with the company. It would be absurd to draw a distinction between that agreement and the others. The contract for each of them was with the company and not with Mr. Bayne.
Mr. Hames’ second point is this: he says that the company is not bound by the letters which were signed by Mr. Bayne as “Company Secretary.” He says that, on the authorities, a company secretary fulfils a very humble role: and that he has no authority to make any contracts or representations on behalf of the company. He refers to Barnett, Hoares & Co v South London Tramways Co (1887) 18 QBD 815 where Lord Esher M.R. said at p. 817:
“A secretary is a mere servant; his position is that he is to do what he is told, and no person can assume that he has any authority to represent anything at all; …”
Those words were approved by Lord Macnaghten in George Whitechurch Ltd v Cavanagh [1902] AC 117, 124. They are supported by the decision in Ruben v Great Fingall Consolidated [1906] AC 439. They are referred to in some of the textbooks as authoritative.
But times have changed. A company secretary is a much more important person nowadays than he was in 1887. He is an officer of the company with extensive duties and responsibilities. This appears not only in the modern Companies Acts, but also by the role which he plays in the day-to-day business of companies. He is no longer a mere clerk. He regularly makes representations on behalf of the company and enters into contracts on its behalf which come within the day-to-day running of the company’s business. So much so that he may be regarded as held out as having authority to do such things on behalf of the company. He is certainly entitled to sign contracts connected with the administrative side of a company’s affairs, such as employing staff, and ordering cars, and so forth. All such matters now come within the ostensible authority of a company’s secretary.
Accordingly I agree with the judge that Mr. R. L. Bayne, as company secretary, had ostensible authority to enter into contracts for the hire of these cars and, therefore, the company must pay for them. Mr. Bayne was a fraud. But it was the company which put him in the position in which he, as company secretary, was able to commit the frauds. So the defendants are liable. I would dismiss the appeal, accordingly.”
Salmon LJ
The secretary ‘is the chief administrative officer of the company’ so he has ostensible authority with administrative matters. Nothing is more natural than ‘ordering cars so that its servants may go and meet foreign customers at airports, nothing to my mind, is more natural than that the company should hire those cars through its secretary.’ It might not be so with matters of commercial management of the company, for example, a contract for the sale or purchase of goods in which the company deals’ but that was not the case here.
Nationwide Building Society v Lewis & Anor
[1998] EWCA Civ 337
Gibson LJ
“Mr Jackson challenges the judge’s reasoning on two grounds. First, he submits that there was no act by the plaintiff which could amount to the giving of credit by the plaintiff to the firm, at any rate after the contract of retainer was made. Second, he submits that there is no evidence that the plaintiff did anything on the faith of, or in reliance on, the representation that Mr Williams was a partner and the judge was wrong to presume such reliance. We did not hear argument on Mr Jackson’s first submission based on the meaning of “given credit” in section l4(l), as we indicated that as the plaintiff was not basing itself on section l4(l) alone and as the common law doctrine of estoppel by holding out was wider than section l4(l), it mattered not how the statutory language was construed. The position at common law seems to me to have been well expressed by Lord Esher MR in Re Fraser [l892] 2 Q.B. 633 at 637:
“The doctrine of ‘holding out’ is a branch of the doctrine of estoppel. If a man holds himself out as a partner in a firm, and thereby induces another person to act upon that representation, he is estopped as regards that person from saying that he is not a partner. The representation may be made either by acts or by words; but the estoppel can be relied upon only by the person to whom the representation has been made in either way, and who has acted upon the faith of it.”
I should also quote from Lynch v. Stiff (1943) 68 C.L.R. 428 a decision of the High Court of Australia on the Partnership Act l892 of New South Wales which contains precisely the same wording as section l4(l) of the Partnership Act l890. At page 435 this appears in the judgment of the court (Chief Justice Latham, Mr Justice Rich, Mr Justice McTiernan and Mr Justice Williams):
“The doctrine of holding out is a branch of the law of estoppel. So far as the element of action by the party relying upon an estoppel is concerned, it is sufficient if that party acts to his prejudice upon a representation made with the intention that it should be so acted upon, though it is not proved that in the absence of the representation he would not have so acted.”
………………….
Mr Patten supports the judge’s reasoning. He submits that it can be presumed in the circumstances of this case that the plaintiff did act on the faith of, or on reliance on, the representation. He points out that the holding-out of Mr Williams as a partner was a continuous act. He submits that it is clear beyond doubt that it was the firm which the plaintiff retained. Mr Patten places particular reliance on the letter of l0th May, containing as it does the features to which I have already referred. In his skeleton argument he submitted that it was clear from authority that reliance on the doctrine of holding-out as a partner can be presumed.
For this proposition he referred to Hudgell Yeates & Co. v Watson [1978] Q.B. 45l. In that case a Mr Smith who was temporarily not qualified to act as a solicitor had been held out as a partner of the plaintiff firm of solicitors. The defendant, for whom the plaintiffs had acted in litigation sought, to resist a claim by the plaintiffs for their costs. His defence included the point that, although Mr Smith had not acted for him, his disqualification meant that there was a breach of the Solicitors Act l957, disentitling the plaintiffs from recovering their costs. That point failed, but there was some discussion by this court of the effect of Mr Smith being held out to be a partner. Lord Justice Megaw said at page 470:
“But what is the effect of a holding-out of someone as being a partner? A holding-out is relevant, and relevant only, as an estoppel. As it is put in Lindley on Partnership l3th ed. (l97l), p.l00:
´The doctrine that a person holding himself out as a partner, and thereby inducing others to act on the faith of his representations, is liable to them as if he were in fact a partner is nothing more than an illustration of the general principle of estoppel by conduct.’
For an estoppel to exist it is necessary to show, not only that there has been an unequivocal representation (here the holding-out), but also that the person seeking to assert an estoppel has acted on the faith of the representation: Freedman v. Cooke (l848) 2 Ex. 654. This requirement is stressed by Lord Blackburn in his speech in Scarf v. Jardine (l882) 7 App. Cas. 345, 357 where he says: ´I put rather an emphasis on those last words “against those who acted upon the faith that the authority continued.”‘”
Lord Justice Megaw then referred to the fact that the defendant could not say that he instructed the plaintiffs on the faith of the holding-out, nor that he suffered any detriment. Lord Justice Megaw continued at pages 470-1:
“So, though there was a holding-out – a continued holding- out – of Mr Smith as being a partner when he was not, there is no estoppel in favour of the defendant on the facts of this case. It is not that the defendant is estopped from alleging the holding-out. He is not. It is that the holding-out was irrelevant because the defendant’s own assertion as to his state of mind involves that he did not rely on it. We are not here concerned with any question as to the burden of proof, or as to presumptions, in relation to reliance on a holding-out. As the defendant did not rely upon the holding-out and as, in law, Mr Smith was not a partner, the partners in the new partnership, which had come into existence before the defendant gave his instructions, are not contaminated so as to lose their entitlement to profit costs for work done, not being work done by Mr Smith, by reason of any question of partnership between them and the temporarily unqualified Mr Smith.
We do not, therefore, have to consider what the position would have been if the defendant had, or was deemed to have, relied upon the holding-out of Mr Smith as a partner.”
Mr Patten fastened on the propenultimate and last sentences as suggesting a recognition by Lord Justice Megaw that reliance can be presumed.
Industrie Chemiche Italia Centrals v Alexandra G Tsavliris Maritime
[1996) 1 ALLER 114
PARKER LJ
“The starting point of cargo owners’ argument is that it has been accepted law for a century or thereabouts that unless in a particular case a term giving authority is expressed or can be implied in the contract of carriage, neither shipowners nor master has authority to bind cargo owners save in circumstances which create agency of necessity.
As Sheen J observed ([1989] 2 Ll p 45), this contention receives support from the authors of well known text books on the law of salvage. Indeed it does and not only from the authors of books on the law of salvage. Reference may be made inter alia to Kennedy, Law of Salvage, in all five editions, particularly paragraphs 720-722 of the 5th edition; Brice, Maritime Law of Salvage paragraphs 437-439; Scrutton on Charterparties, 19th Edition, Articles 121-124; Carver, Carriage by Sea, 13th Edition paragraph 127; Bowstead on Agency, 15th Edition, pp 84 – 90 and Goff and Jones, The Law of Restitution, 3rd Edition, pp 332 – 336.
More importantly perhaps it receives support from a number of decided cases.
It is convenient to start with reference to The Onward (1873) LR 4 Adm & Ecc 38, a case in which the holders of a bottomry bond sought to enforce it against the ship, freight and cargo and in which it was held that the bond was invalid against the cargo on the ground that there was not, in the circumstances, such a prior communication with cargo owners as was required by law. At p 51 Sir Robert Phillimore said:-
“According to the law, the master is always the agent for the ship, and in special cases of necessity the agent for the cargo also.
“He is the appointed agent to the former, the involuntary agent of the latter. From these principles of jurisprudence two important consequences flow.
“First, when the circumstances permit, the master must communicate with the owner before he does any acts which seriously affect the value of the ship in the one case or of the cargo in the other.
This is a doctrine at which the English Courts have slowly but steadily arrived.”
This clear distinction between the relationship between the master and the shipowner on the one hand and the master and the cargo owner on the other is of crucial importance. In the one case there can easily be grafted on to an existing agency apparent or usual authority or ostensible authority. In the other there is initially no agency. The cargo owner has merely a contract of carriage with the shipowner, which casts upon the latter certain duties which must be carried out by the master on his behalf.
I go next to The Bonaparte (1853) 8 Moore PC 460, heard in the Privy Council on appeal from the High Court of Admiralty. At p 473, Knight Bruce LJ said:
“That it is an universal rule, that the master, if in a state of distress or pressure, before hypothecating the cargo, must communicate, or even endeavour to communicate, with the owner of the cargo, has not been alleged, and is a position that could not be maintained; but it may safely both on authority and on principle, be said, that in general it is his duty to do so, or it is his duty in general to attempt to do so. If, according to the circumstances in which he is placed, it is reasonable that he should, it was rational to expect that he might obtain an answer within a time not inconvenient with reference to the circumstances of the case; it must be taken, therefore, upon authority and principle, that it is the duty of the master to do so, or at least to make the attempt.
Now, in this case, considering the distance between Sweden and England, considering the length of time that elapsed before the repairs were done, their Lordships are of opinion that, supposing the point to be open on these papers, the materials before their Lordships show that the master did not do his duty to the owners of the cargo, and was not warranted, therefore, in hypothecating it.”
In Cargo ex the “Hamburg” (1863) 2 Moore (NS) 289, also an appeal to the Privy Council from the Admiralty Court, it was held that a bottomry bond could not be enforced against cargo owners because (i) the master had had a reasonable opportunity of communicating with them and of obtaining directions from them; and (ii) it was his duty to endeavour to obtain such directions.
At pp 320-21 in the judgment, Lord Kingsdown corrected the passage in the quotation from The Bonaparte which I have emphasised so as to read:-
“If according to the circumstances in which he is placed, it be reasonable that he should — if it be rational to expect that he may — obtain an answer within a time not inconvenient with reference to the circumstances of the case, then it must be taken upon authority and principle that it is the duty of the Master to do so, or at least to make the attempt.”
He then went on:
“In the rule thus enunciated their Lordships are unable to discern any novelty, either in the principle on which it rests, or in its application to the case of the hypothecation of the cargo of a ship by the Master.
“The character of agent for the owners of the cargo is imposed upon the Master by the necessity of the case, and by that alone. In the circumstances supposed something must be done, and there is nobody present who has authority to decide what shall be done. The Master is invested by presumption of law with authority to give directions on this ground — that the owners have no means of expressing their wishes. But when such means exist, when communication can be made to the owners, and they can give their own orders, the character of agent is not imposed upon the Master, because the necessity which creates it does not arise.”
There are many other statements of a like character. I cite only the following further passages.
In Anderson Tritton & Co v. Ocean Steamship Company (1884) 10 AC 107, a case in which the ship, having paid salvors for salvage services, sought to recover from cargo owners their due proportion in general average, Lord Blackburn said at p 117:
“I think therefore that it was quite clear that there was a contract binding on the owner of the Achilles to pay this sum of £2691 18s 6d to the owners of the Shanghai; whether it was made by themselves or by their master for them is, as far as regards the binding of the owners of the Achilles, unimportant. But neither the owners of the ship nor their master have authority to bind the goods, or the owners of the goods by any contract.”
In The Troilus [1951] AC 820, a case in which the issue was whether certain services were salvage services, Lord Porter observed at p 833 and 834 :–
“The master or owner or manager of the vessel alleged to have been salved cannot, of course, bind the cargo owners to pay salvage where the services rendered are not salvage services, any more than he can bind him to pay the amount which he has promised to the vessel which is said to have salved his ship …
If a vessel is in danger as defined by Dr Lushington in The Charlotte, and salvage services are offered, the master must make up his mind whether to accept them or not. In so doing he must, of course, act like a prudent master but considerable latitude ought to be allowed him, more particularly in a case such as the present, where the ship is carrying a general cargo and it is therefore a difficult task involving much delay to communicate with the various owners. He is responsible for ship and cargo and the danger of failing to accept salvage services or of dispensing with them at too early a period is well illustrated by the case of The Germania.”
In China Pacific SA v. Food Corporation of India [1982] AC 939, Lord Diplock at p 958 considered and distinguished between those cases, such as the present, where the question is whether the circumstances are such as to create direct contractual relationships between the cargo owner and the salvors, and those cases where the master, in pursuance of his duties, incurs expenses in the preservation of the cargo and carrying them safely to their destination under the contract of carriage and seeks to recover those expenses from the cargo owners. He said:
“The legal nature of the relationship between the master and the owner of the cargo aboard the vessel in signing the agreement on the latter’s behalf is often though not invariably an agency of necessity. It arises only when salvage services by a third party are necessary for the preservation of the cargo. Whether one person is entitled to act as agent of necessity for another person is relevant to the question whether circumstances exist which in law have the effect of conferring on him authority to create contractual rights and obligations between that other person and a third party that are directly enforceable by each against the other. It would, I think, be an aid to clarity of legal thinking if the use of the expression ‘agent of necessity’ were confined to contexts in which this was the question to be determined and not extended, as it often is, to cases where the only relevant question is whether a person who without obtaining instructions from the owner of goods incurs expense in taking steps that are reasonably necessary for their preservation is in law entitled to recover from the owner of the goods the reasonable expenses incurred by him taking those steps. Its use in this wider sense may, I think, have led to some confusion in the instant case, since where reimbursement is the only relevant question all of those conditions that must be fulfilled in order to entitle one person to act on behalf of another in creating direct contractual relationships between that other person and a third party may not necessarily apply.
SLADE LJ
I have had the advantage of reading the judgment of Parker LJ in draft. I gratefully adopt his summary of the facts and the issues on this appeal. For the reasons given by him, with which I am in full agreement, I am of the opinion that this appeal must be allowed. I add something of my own primarily with reference to the concept of “implied actual authority”, which I think gave rise to some confusion in the course of argument on this appeal, and to the decision of Brandon J in The Unique Mariner [1978] 1 Lloyds Rep 438.
It has been common ground both in the court below (see [1989] 2 Lloyds Rep 47), and in this court that
(A) in a contract of carriage of goods by sea (unless the implication of such a term would be contrary to the express provisions of the contract) the law will imply a term conferring on the shipowners and master authority to enter into salvage contracts on behalf of cargo owners when the circumstances give rise to an agency of necessity;
(B) the criteria of an agency of necessity will be satisfied if in all the circumstances
(1) it is necessary to take salvage assistance, and
(2) it is not reasonably practicable to communicate with the cargo owners or to obtain their instructions; and
(3) the master of shipowners act bona fide in the interests of the cargo; and
(4) it is reasonable for the master or shipowner to enter into the particular contract.
……………..
“…the law can be summarised shortly as follows. (1) An undisclosed principal may sue and be sued on a contract made by an agent on his behalf, acting within the scope of his actual authority. (2) In entering into the contract, the agent must intend to act on the principal’s behalf. (3) The agent of an undisclosed principal may also sue and be sued on the contract. (4) Any defence which the third party may have against the agent is available against his principal. (5) The terms of the contract may, expressly or by implication, exclude the principal’s right to sue, and his liability to be sued.” : Lord Lloyd in Siu Yin Kwan v. Eastern Insurance Co. Ltd. [1994] 1 All E.R. 213, 220 (Privy Council).