Agency in International Trade

Agent is employed
To market a particular product To penetrate a market known especially to the agent by virtue of his knowledge, skill, experience and personal attributes To secure sub-agents to sell a product To elicit relevant information relevant to the principals business To represent the principal at trade fairs, publicity events and conferences To secure credit on behalf of the principal To procure certain goods or services for the principal. To secure insurance for goods, finance from banks and lenders, freight space for ship owners, legal advice in a foreign country..

The legal nature of the contract of agency

An agent in the legal sense is a person who has authority from another person, that is the principal to represent him or act on his behalf in relation to third persons. In international trade, the authority normally takes one of two forms(a) the agent maybe authorised to introduce third parties in his territory to the principal. OR (b) the agent has authority to conclude contracts with third parties on behalf of the principal.

Authority of an agent
The authority that a principal gives an agent maybe actual authority or ostensible authority. Actual authority is the authority given to the agent by contract with the principal either expressly, impliedly, or by conduct or conferred on him by law as in the case of agency by necessity.

 Ostensible authority or apparent authority is the authority of an agent as it appears to others. Four conditions must be satisfied for a third party to rely on such agents:(1) a representation must have been made to the third party; (2) it was made by the principal or by a person who had actual authority; (3) the third party relied on the representation; and (4) the principal had capacity to contract.

Contracts made by agents

Usually the agent is not obliged to disclose his representative capacity to the third party. In an agency agreements there exists three possibilities: (1) the agent does not disclose the existence of his principal and concludes the contract in his own name. here he acts for an undisclosed principal. (2) the agent discloses his principals existence but not his name. For e.g. by signing a contract on behalf of our principals. In this case he acts for an unnamed principal, or (3) the agent discloses both the existence and the name of his principal. Here he acts for a named principal.

In the case of undisclosed principal

If the agent concludes the contract with the third party in his own name that is without revealing his representative capacity, two rights arise: Third partys right of election and Principals right of intervention. The liability of the agent is generally personal liability. In siu yin kwan v Eastern Insurance(The Osprey) [1994]1 All.E.R. 213 the Privy Council held that, the principal in an undisclosed agency may intervene as long as he could prove that the agency was in existence when the contract was made and that he had the capacity to make that contract. It follows therefore that the principal can only intervene if the contract in question had been approved and authorised by him before it was entered into.

Unnamed principal
Here the agent discloses that the fact he is contracting as an agent but the identity of the principal is not revealed. in such a case he will ot be personally liable for the contracts he enters into.

Named principal
Here the agent contracts on behalf of the principal. The general rule is that the agent does not incur any personal liability. There are some exceptions to this rule. they are

Types of agents relevant to international trade Factors

a person who has the possession of the goods belonging to the principal. Thus he can sell those goods or make consignment to sell those goods for the benefit of the principal. Brokers broker is one who negotiates on behalf of the buyers and sellers. He doesn't have the possession of the goods. His business is to introduce customers to sellers and viceversa. Commission agents commission agent enters into contract with third parties in his own name but as agent. Confirming houses they takes on the role of an agent for an overseas buyer who is interested in buying goods from a seller in the country. Forwarding agents and loading brokers they are agents in carriage of goods. The duties of a forwarding agent is to obtain space allocation for goods, to ascertain the date and place of sailing, to prepare bills of lading and to send it to the loading broker. loading brokers are usually employed to arrange for the goos to be brought alongside the vessel, to make customary entry for the cargo, to collect the bill of lading and to send it to the shipper.

Duties of an agent
To exercise due care and diligence in the performance of his duties and to apply any special skills which he profess to possess. The duty is measured against the reasonable standard of care required of the type of professional that the agent claims to be.

 the duty to comply with lawful instructions. The agent is obliged to perform according to the instructions in the contract and/or instructions meted out by the principal from time to time during the duration of the contract. This duty is qualified only when the instructions fall within: (a) the terms of the contract between the principal and the agent. (b) the law, and (c) any professional rules of conduct under which the agent is subject.

 Duty not to delegate and the duty of confidence. Delegatus non potest delegate Fiduciary duties

Termination of agency Termination by act of parties By mutual consent On breach of a condition On the completion of the duration of the agency
Termination by operation of law Death of either party Insanity Frustration of the contract.