Case 1 1. An agent is a person (which can include an entity, like a corporation, partnership, or LLC) who acts on behalf of and subject to the control of another by authority from him.
The category of agent can affect their liability to any claims and the two main categories of agent:
General agent: a general agent is an agent authorized by the principal to conduct a series of transactions involving continuity of service, like a manager of a business. A general agent does not require fresh authorization for each transaction.
Special agent: a special agent is an agent who is authorized to conduct a single transaction or a series of transactions not involving continuity of service. In other words, an agent who is given specific authority and specific instructions for a specific purpose is called special agent.

Jane’s contract, which gives her authority to act on their behalf for the purchase of all ladies fashion ranges fulfills three elements-consent, control and on behalf of-of an agency relationship indicating that the case satisfies the definition of agency relationship between the Jane and her employer. Jane is supposed to be regarded as a special agent since the contract specifically mentions the range of her authority which is all ladies fashion ranges. We should pay attention that, as generally, the principal will not be liable for third parties who deal with special agents in areas outwith their specific instructions.

2. Before an agency can be formed, both the principal and the agent should have the legal capacity and actually exist. Generally, a person can do anything through an agent that he or she could legally do personally.
The ways in which an agency can come into being:
1) Agency created by express appointment. In common with other types of contract, an agency can be created expressly – either in writing or orally. Examples of types of express written appointment would include partnership agreements, powers of attorney, and any mandates. Although agency need not be constituted in writing, under the Commercial Agents(Council Directive)Regulations 1993,Regulation 13,commercial agents and principals are entitled to obtain from each other a statement of the terms on which they will do business together.
2) Agency created by implied appointment. This occurs when there has been no express or deliberate appointment of an agent by a principal, but an agency relationship arises through the actions of the parties. Employees in senior positions are usually regarded as agents for an organization. For example, in the case of Neville v C & A Modes Ltd(1945) a shop manager was held to be an agent. It can also exist through operation of law, such as a statutory provision – for example a partner acts as an agent for his partnership under Section 5 of the Partnership Act 1890.A company director is also an implied agent of the company.
3) Agency created by ratification. A principal may retrospectively authorize the act of an agent. He might be unaware that the agent had acted for him, but on becoming aware he may retrospectively authorize the act by a positive action or by his conduct. There are three conditions for ratification:
(i) The agent must act as agent and must hace let the third party know this was the case
(ii) The principal must exist
(iii) The principal must have the required legal capacity. A situation where a principal did not exist was discussed in the case of Phonogram v Lane (1982). Here a contract was made by a prospective director of accompany that had not yet been formed. It was held that in this instance the agent (the prospective director) would himself be liable for obligations arising under the contract as the company itself did not exist at the time the contract was med.
4) Agency created by necessity. This occurs where there is an emergency and an agent has to carry out vital acts for a principal without receiving instructions. In Scots law it is referred to as arising from ‘negotiorum gestio’(‘management of affairs’) The sort of situation where this most likely to occur would be during extreme weather conditions or during a war. Nowadays it is unlikely that someone could not be contacted if an emergency situation arises. In the case of Fernie v Robertson(1871),an agency of necessity arose when a senile person’s estate was liable for house repair bills contracted on her behalf as the senile woman was too ill to issue instructions. Anyone acting as an agent of necessity should do so in the interests of the person they are helping and in good faith.
5) Agency created by holding out. This can arise where a principal dose not contradict an impression that someone is his agent or allows someone to represent him or herself as an agent without any objection. There must also be reliance on the representation and it must have been reasonable for the third party to do so.
6) The relationship known as del credere agency. This is situation where a mercantile agent guarantees payment or performance by the third party if the third party fails to pay the principal. The agent therefore effectively bears the risk of the transaction.

In Jane’s scenario, her employee signed a contract authorizing the agency issue with her indicating that the agency relationship was established.
The way in which the agency relationship came into being is through express appointment. Clearly, in this case the agency created by necessity does not exist. Fernie V Robertson (1871), an agency of necessity arose when a senile perse`s estate was liable for house repair bills contracted on her behalf as the senile woman was too ill to issue instructions.
Furthermore, the case does not satisfy the category of Agency created by ratification since the employer is not happy and does not retrospectively authorize the act by a positive action or by his conduct.

3. Therefore four categories of authority
1) Express authority. May be verbal or in writing. Acting under express (or implied authority) the principal will be liable for the agents’ actions. Panorama Developments (Guildford) Ltd V Fidelia Furnishing Ltd (1971).
2) Implied authority is authority to do all that is necessary (within reason) to the Agents express authority and it is presumed that the principal consents to this. Watteau V Fenwick (1983).
3) Ostensible authority is also known as apparent authority. It occurs where a principal allows a situation to continue which gives third parties the impression that the agent has the authority to act in a certain way, even if there is no authority to do so. International Sponge Importers V Watt & Sons (1911).
4) Presumed authority occurs where there is an agency of necessity. In Jane’s case, the authority falls in the category of express authority because the contract indicates that Jane should do her agency stuff within ladies’ fashion scope. As for her behavior of signing the contract of men’s clothes, this action does not fulfill the category of ostensible authority since the third party does not have reasons to believe that Jane has the authority to do so. The agent should not act outwith the scope of the agency.

4. The agent has several duties to the principal.

1) Duty of good conduct; duty to obey
An agent is subject to a duty not to act in a manner that makes continued friendly relations with the principal impossible. Also, the agent must not bring disrepute to the principal. An agent must obey all reasonable directions of the principal. Betram V Godfrey (1830). 2) Duty to indemnify principal for loss caused by misconduct
A principal has a right of indemnity against an agent for losses caused by wrongful behavior. 3) Duty to account. Must keep all accounts accurate for the principal. 4) Duty of care and full disclosure.
The duty of care includes the duty of paid agent to act with the ordinary skill of persons performing similar work loacality. Luxmore–May V Messenger May Bostock (1990). Solicitors Estate Agency v MacIver (1992) 5) Duty of loyalty
It is the agent’s obligation as a fiduciary to keep the principal’s interest foremost in mind when acting on the matter entrusted to him. 6) Act in good faith
In best interests of principal and avoid conflict of interest. Solicitors Estate Agency v MacIver (1992). Jane does not obey the requirement of principal. She had a duty to obey instructions within the specific authority she had been given.

Jane Black is a special agent in the case study and it would seem that she has been given an express appointment with express authority.

She just has authority to purchase ladies clothing, but she oversteps her authority and has entered into a contract with a supplier of men’s clothing.
So she has breached the agency contract. She can explain the advantage of the styles and the low price paid of these men’s clothing to her employer, and discuss whether them can purchase it. And she can also discuss with the supplier of the men’s clothing if she could cancel the contract.

Case 2

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[ 1 ]. J. Dennis Hynes, Agency, Partnership and the LLC 2th Edition（Beijing：Law Press, 2004）,p23.
[ 2 ]. Barnes, Dworkin, Richards, Law for Business 9th Edition (New York: McGraw-Hill Companies, 2006), p380.