Golf Cheque Case Study

1588 Words7 Pages
3.2 Agency An agent is a person authorized to negotiate and enter into contracts on behalf of another who is known as the principal in his dealings with a third party. The legal relationship between an agent and a principal is an agency. For examples, between a client as a principal (P) and lawyer as an agent(A), employer (P) and employee (A), house owner (P) and housing agent (A) and others. The principal and the agent are in an employment contract where the terms of appointment and authority have been set out. The effect is the principal will be bound by any contract the agent makes while acting within his authority For example, the agent is employed to sell the principal’s house. An agreement is made by the agent with the third party…show more content…
Another rule that float the doctrine of privity is section 184 of the Contracts Act. It provides that an undisclosed principal can sue and be sued on a contract made by its agent, although it is not a party to the contract, such when the contract made by the agent did not make known to the third party that he was acting as an agent for the principal, thus the third party was unaware at the time he entered into the contract, he actually has a contractual relationship with a person of whose existence he does not…show more content…
By having this doctrine, a third party beneficiary could not take advantages from the contract to which he or she is not a party. This is because if the third part has been given the right, it would be hard for a promisor if he or she had to face actions for breach of contract from both the promisee and the third party. Not only that, the ability of the parties to vary or terminate the contract in enforcement of the contract would be affected if there is interfering from the third party. However, the strictness of the doctrine leads to commercial inconvenience. This may create great injustices to a third party who may be a victim or does not have a right in the contract. It defeats the intentions of the parties to the contract. For example, the insurance life which the purpose is to give a benefit to the policy family owner when the policy died but because of the strictness of doctrine of privity, it cannot be done. It creates uncertainty in contractual relationships given that the doctrine can be said that it is too harsh. Days by days, this rule has been criticised particularly in cases where the contract is for the benefit of the third party. At this time there has been no statute introduced and the rule persists in Malaysian Law to prevent a third-party enforcing contractual provisions made in their favour. It can be seen that thru this doctrine exist behind the rise in the

    More about Golf Cheque Case Study

      Open Document