Capacity to Act as Principal Under the Law of Agency

Capacity to Act as Principal

The general principle of law in this regard is that the competency of a person to entrust to another the performance of a task for and on his behalf is co-existent with the competency of that person to perform the task himself. However, to every rule, there is always an  exception.  In this instance where delegation of that said power is prohibited by law,  the general common law rule that powers could be delegated will be of  no effect.

Section 72 of the Companies and Allied Matters Act of 1990 provides thus:

“Any contract or other transactions purporting to be entered into by the company or by any person on behalf of the company after its formation and thereupon the  company shall become bound by and entitled to the benefit thereof as if it has been in existence of the date of such contract or other transaction and had been a party thereto”.

“Prior to its ratification by the company, the person who purported to act in the name of or on behalf of the  company shall in the absence of express agreement to the contrary, be personally bound by the contract or other transaction and entitled to the benefit thereof”. The principle usually applied is often expressed in the maxim “NEMO POTEST FACERE PER ALIUM, QUOD PER SE NON POTEST” which means that “no one can do through another what he cannot do himself”.

Three categories of persons, due to natural or legal disability are either totally or partially incompetent to be principals. These shall be discussed in eh next segment.

Infants

Generally, an infant cannot validly appoint another person, whether an adult or an infant to be or act as his agent except in the circumstances in which he can act personally or for himself. However, under the general law governing contracts, an infant can validly contract only for his legal necessaries. The term necessaries is not restricted to bare essentials of life, but extend to articles and matters which can be considered reasonably necessary to him, having regard to his state of life.

Mentally ill Persons

As in the case of an infant, a mentally ill person cannot appoint an agent where the circumstances are such that he would have been bound if he had himself personally acted. To render on appointment by such a  person void and of no effect, it  must be shown  that his infirmity was such as to render him incapable of comprehending the true nature and probable consequences of his act.

Corporations

The primary legal status of the particular corporation usually determines the competence of that corporation to appoint a person as its agent. This presupposes that if a corporation has legal personality of its own quite distinct from those of its member constituting it, it can contract and do other legal acts on its own behalf and in its own name just like an ordinary person.

However, to be so competent, the corporation must have been duly registered under the Companies and Allied Matters Act of  2004  and must have fulfilled the requirements of the Act. In that  regard,  section 63, (1) of the CAMA 2004 states that: “A company shall act through its members in general meeting or its board of directors or through officers or agents appointed by or under authority derived from the members in general meeting or the board of directors”.

Section 65 of CAMA states in part:

“Any act of the member, in general meeting, the board of directors, or of a managing director while carrying on in the usual way the business of the company shall be treated as the act of the company itself and the company shall be criminally and  civilly liable thereof to the same extent as if it were a natural person”.

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