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Contract Law Assignment: Case Analysis Based onRights &Liabilities of Parties


Task: Write a reflective journal on computer architecture assignment analysing the theoretical concepts captured from the weekly material.


The issue in this scenario of contract law assignment is related with the rights and liabilities of the parties that arise under the law of contract and then the bodies have been acting as principal and agent. The rights and liabilities of different parties can be described as follows:

Jim: Law recognizes one person as having the authority to create or amend legal rights, duties or connections for another person, known as the principle, under this type of relationship. By introducing the third party, requesting orders from the third party, or finalizing contracts with the third party on behalf of the principle, the agent helps contracts between the principal and a third party (the customer). The supplier often pays a commission to the agent for bringing new business. In most cases, an agent is not liable to his consumers because he does not enter into a direct contract with them (Ireland v Livingstone, 1872).

There is a common consensus that the contract belongs to the primary, and only the principal can sue or be sued. However, this consensus can be overturned if the parties' intentions are different, taking into account the form and conditions of the contract as well as the surrounding circumstances.

This rule applies unless it is clear from other conditions in the contract that the agent would be held responsible for its performance, in which case it may be assumed that they have contracted both as agent and principal. Therefore in the present scenario it can be stated that Jim had been acting as a principal and he is bound by the contracts created by Anna.

Anna: Anna had been acting as an agent for Tim and while acting so, she had purchase 50 crates of wine for herself and made a good profit by sending these 50 crates of wine. However, she had disclosed to distract him and the purchase made by Anna was ratified by Jim. Therefore even if the law of agency provides that an agent is not allowed to make a secret profit but if the act has been ratified by the principal, such act becomes valid. An agent acting on behalf of a principal without authorization is in violation of the doctrine of ratification. This means that ratification happens if one party shows that the other has obviously approved an illegal transaction carried out on their behalf through their agent. It is not necessary to inform the third party or the agent of this intention. The term "express ratification" speaks for itself. When a principal's actions or circumstances suggest that the principal has endorsed the actions of the agent, an implied ratification will take place (Freeman & Lockyer v Buckhurst Ltd., 1964).

It can be stated that in this case, and I had made a profit by selling 50 crates of wine but Jim was told regarding this action and the same was ratified by Jim. Therefore, in the present case Jim is bound by this action of Anna and she had not breached any duty as an agent by making this profit.

Gus:In the present scenario, and Anna entered into a contract with Gus on behalf of Jim. It is a clear case of a contract created by an agent. As a result, Gus is bound by this contract. Even if the contract was created by Anna but she was acting as an agent and therefore the contract has been created between Gus and Jim who was the principal in this case. If two requirements are met, the third person will be accountable if the primary is revealed or partially revealed. The agent must have exercised authority in the first place. There must have been some kind of oversight by the agency (Bradgate & White, 2012). As a second prerequisite, the contract must not have excluded the principle as a party. Most of the time, the business owner wants to keep all of his or her assets safe and avoid any legal ramifications. The principal may ask to be excluded from the transaction in these cases. Keep the principal out of the contract, though, and you risk losing any claims you might have against the third party (Watteau v Fenwick, 1893). While dealing with an unknown principal, the third party's liability can get complicated. It is necessary to meet a number of requirements. When dealing with a partially or fully revealed or otherwise known principal in a contract, the principal must not be excluded by the terms of the agreement. In addition, the principal's existence cannot have been fraudulently hid (Keighley, Maxsted& Co v Durant, 1901). This can be used against an agent who misrepresents to a third party that they are not operating on behalf of their principal, which in turn can be used against their principal if they knew or should know that they would not be dealing with their principal. A third party cannot use an offset or similar defense against the principal in order for the agent to be held accountable (Cooke & Sons v. Eshelby, 1887).

Paula:When it comes to the rights and liabilities of Paula, the issue is related with the scenario involving undisclosed principal. Jim had told Anna that as he was having strange relations with Paula, Anna should not tell Paula that she was acting as an agent for Jim. Agency is a form of unique contract between two or more persons, in which one person (the agent) acts on behalf of the other person (the customer) (principal). One or more subagents may be employed by such an agent. Unknown Principal is a legal concept that falls within the umbrella of the law of agency (Goode & McKendrick, 2017). Any discussions with a third party will be conducted by an Undisclosed Principal, a person whose identity is kept secret. A third party, unaware of the principal's existence, assumes the agent is operating on his own behalf. To put it another way, a third party sees the agent as acting on behalf of the latter's interests. In most cases, the agent acts on behalf of the principle only if the principal specifically instructs him to do so, but this can also happen when the agent wants to bind himself solely. Unless there are unique circumstances, the agent is considered personally accountable in such scenarios. However, Common Law does not totally exclude such an Undisclosed Principal and imposes certain duties and liabilities in the event of default, and it also provides certain rights to him. Privileged status of contract is an exception here (Smith v Hughes, 1871). Unknown principal refers to an agent's obligation on behalf of a principal who hasn't been made aware that they're being held liable for their actions Because he is acting on behalf of the principal, the agent may be held personally accountable for his activities if he fails to disclose the nature of his agency. When a person acts as an agent on behalf of another person, he or she is generally not held accountable for the actions of that person if he or she discloses that person's name and agency. A fake buyer's principal may or may not be hidden from view.

Therefore in the present case ofcontract law assignment, it is not possible for Jim to sue Paula for her failure to give assistance in deciding the page belonging to Jim.

Bradgate, R & White, F - Commercial Law, (Oxford: OUP, 2012)
Goode, R & McKendrick, E - Commercial Law, 5th edition, (London: Penguin, 2017)
Ireland v Livingstone (1872) LR 5 HL 395
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Watteau v Fenwick [1893] 1 QB 346
Cooke & Sons v. Eshelby (1887) 12 App.Cas. 271
Keighley, Maxsted& Co v Durant. [1901] AC 240
Smith v Hughes (1871) LR 6 QB 597


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