First Principles of Business Law

1. General concepts underlying agency

1.4. Acting through a representative

Another concept that is important to understanding the law of agency is that of conducting legal relations through a representative.  Consider the following facts and then answer the questions.

A employs B as his assistant. He instructs B to go to a neighbouring town where C is offering to sell a packing machine for $1000. A tells B to negotiate on his behalf to buy the machine for no more than $900 and, when he has bought it, to pay for it. B tells C he is acting for A. He reaches agreement to buy the machine for $900 and pays C. C fails to deliver the machine to A.

1. Is it clear from the facts that B has acted as A's representative when buying and paying for the packing machine?

2. In these circumstances, can A sue C for delivery, on the basis that he (A) has bought and paid for the packing machine?

3. In this example, is it true to say that as A's representative, B has both created and discharged legal obligations on behalf of A?