The
concept of agency in commercial transactions is a vital concept. With the role
played by agents as middlemen in the actualization of existence of contracts,
it appears their existence is unavoidable.
Agents do not come on board of business transactions without the requisite
consent, approval or authority of their principals to so act. Hence, they
derive their authorities to act through their principals who in turn fulfill
their own obligation under the terms of employment. In this respect, the basic
rules for the coming into effect of a valid contract must be observed. For this
reason, the agent will not be able to enforce such contracts where there is a
perceived breach.
The Consent of the Parties
Though
there may remain some unresolved minor problems, once the relationship of
principal and agent has been shown
to exist absolutely, the main
consequences are clear. A major problem however remains that at determining
whether or not such a relationship exists in any given set of circumstances and if so at what point in
time. The concern in this respect is the consensual aspect of the relationship
as the major determining factor. This is more apparent when considering the
various definitions of agency. An example is the definition preferred by Bowstead.
He defined agency as: “the relationship that exists between two persons, one of
whom expressly or impliedly consents that the
other should represent him or act
on his behalf and the other whom similarly consents to representing the former
or so to act”.
Consent
is also manifested in the definition in
the American Restatement on Agency. It is no doubt that
consent is absolutely necessary in establishing agency relationship. This has
received judicial approval in many cases. For instance in Ayua V Adasu (1992)2 N.W.L.R. 598, the Supreme Court of Nigeria quoted
with approval the dictum of Lord Pearson in Garnac Grain Co. V H.M.F. Fairclough Ltd (1967)1 Lyds. Rep.
495. that; “The relationship of principal and agent can only be established
by consent of the principal and the agent”
The
learned jurist however went on to say that: “They will be held to have
consented if they have agreed to what amounts in law to such a relationship
even if they do not recognize it themselves and if they have professed to disclaim it.”
He
further emphasized that: “The consent must however have been given by each of
them either expressly or by necessary implication from their words or conduct.”
This
dictum of the learned jurist raises two fundamental issues. First is “what
amounts to consent in such a case?” and secondly, whether it is right to say
that the relationship of principal and agent exists only where the agent and
the principal have so consented.”
It is
submitted that consent is fundamental in cases where such relationship was
established by agreement and contract. It is not uncommon to find that in
commercial transactions, most agents are appointed by this method. Under
certain circumstances, the law may impose or thrust agency relationship upon
the parties irrespective
of their consent or indeed knowledge.
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